This week, a Federal Judge in Virginia ruled that Google must pay 1.36% of revenues to a company called Vringo. The heart of the suit pertains to patents held by Vringo, which once belonged to Lycos. If you don’t remember Lycos, they were one of the many terrible web portals Google helped to eradicate from the web.
The patents have to do with advertisements, making this of particular concern to Google. Specifically, this attacks AdWords, which composes a big part of Google’s revenue. The Judge ruled that the intellectual property in question affects roughly 20.9% of Google’s AdWords revenue, with 6.5% of that being kicked back to Vringo.
Vringo has sued Google previously, winning $30 million. This was in 2011, shortly after they acquired the patents from Lycos. In response, google changed their ad auction system, but it wasn’t unique enough for the law. Vringo sued again, and won another settlement.
Though Google has other interests, their bread and butter is still advertisements. As they’re known to do, Google is vowing to fight this to the bitter end. A settlement in the first case was a set amount, and Google likely takes umbrage to the fact that in this most recent decision, a percentage of revenue was awarded. That, over time, could scale. It also provides a variable to the bottom line, and nobody likes that.