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Google Lawsuit Wrap-Up: Win Some, Lose Some


A roundup of Google's legal wins and woes over the past two weeks.


Translating the Rosetta Stone Suit Outcome

October 31 marked a huge win for the search engine giant when, after more than three years of legal proceedings, Google settled a lawsuit launched by Rosetta Stone (NYSE:RST) in 2009. Rosetta Stone had claimed that Google's sale of the language software maker's trademarks to third-party advertisers for use in Google's keyword search optimizer, AdWords, was trademark infringement.

The undisclosed settlement between the two companies is particularly significant.

There are two other US trademark lawsuits involving AdWords -- one with CYBERsitter and the other with Home Decor Center -- currently left pending. Will these pan out similarly? Forbes contributor Eric Goldman certainly thinks so:

I don't think either of the two remaining lawsuits are dangerous to Google. As a result, Google is tantalizingly close to successfully running the table on all of the US trademark challenges to its AdWords practices. When this happens, Google will have legitimized the billions of dollars of revenues it makes by selling trademarked keywords in AdWords.

While the case set no legal precedents, and many central issues were left unresolved, the settlement might be enough to deter future challengers to Google's advertising practices, Goldman writes.

Vringo Win Could Drain Google

On the losing side, Google's defense against mobile software designer Vringo (NYSEAMEX:VRNG) did not hold up in court last Tuesday. Google's loss validated Vringo's ownership of two Internet search filtering patents, and awarded Vringo damages of $32 million from Google and past defendants including AOL (NYSE:AOL), Target (NYSE:TGT), and IAC/Interactive (NASDAQ:IACI).

This ruling, however, could actually end up costing Google much, much more.

As originally pointed out by EXPstocktrader via Seeking Alpha, depending on the growth of these defendants over the next five years, total royalties collected by Vringo could be in the $500 million to $600 million range.

Future suits might be in store for Vringo, reports Paul Quintaro for Bezinga. The most likely defendants? Microsoft (NASDAQ:MSFT) and Yahoo (NASDAQ:YHOO) both infringe on Vringo's property with very similar patents.

Twitter: @brokawbrokaw
No positions in stocks mentioned.
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