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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.

There's been a whole heap of Google (NASDAQ:GOOG) lawsuit news out over the past two weeks. So, for the sake of record, let's recap.

Judge Throws Out Apple's Case Against Google

A trial between Apple (NASDAQ:AAPL) and Google over breach-of-contract claims scheduled to begin last Monday was canceled by a US District Judge, Bloomberg reports. Apple's refusal to honor a patent royalty set by a federal court led the judge to throw the case out. Apple said it would not license the patent in question unless the rate was set at $1 or less per iPhone.

Android Phone Maker and Apple Wipe Legal Record Clean

HTC (TPE:2498) and Apple released a joint statement this weekend announcing all current lawsuits between the companies would be dropped, worldwide. HTC, whose smartphones run Google's Android operating system -- the world's largest by market share -- is just one of a number of Android-related patent infringements that have gone to court. The HTC-Apple deal marks the 15th official Android patent license deal, according to Foss Patents, a software patents news and issues blog.

Here's Foss Patents' reasoning for the settlement:

Both companies simply have other priorities to focus on. For Apple, the competitive challenge it faces from Samsung and from Google's plan to use Motorola Mobility's patents to reach a point of mutually assured destruction are far bigger issues.

Included in the settlement is a 10-year licensing agreement that extends to future and current patents. Beyond this, the settlement details are confidential.

While Google has, in the past, denied any patent infringements on behalf of Android OS, there are currently 20 patents that have been deemed valid and infringed upon by Android devices. This includes a late-October court win by Apple over Samsung (PINK:SSNLF) for four phone patents.

(Read a full recap of last week's most vital Google news here.)

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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