Google Whacked with Huge Patent Infringement Lawsuit

November 1, 2013 by Paul Ausick

The consortium that bought a portfolio of more than 6,000 patents from bankrupt Nortel has filed a patent infringement lawsuit against Google Inc. (NASDAQ: GOOG) and seven other Android phone makers, including Samsung Electronics. The Rockstar Consortium is an alliance of Apple Inc. (NASDAQ: AAPL), Microsoft Corp. (NASDAQ: MSFT), BlackBerry Ltd. (NASDAQ: BBRY), Ericsson (NASDAQ: ERIC) and Sony Corp. (NYSE: SNE) that paid $4.5 billion for the patents in 2011.

Google could have some trouble defending itself because it placed an initial bid for the Nortel portfolio of $900 million and got out of the bidding at $4.4 billion. Legally, it will be difficult for the search giant to argue that the patents have no value when the company itself was trying to acquire them.

According to the lawsuit, Google was aware of the patents-in-suit at the time of the auction and “[d]espite losing in its attempt to acquire the patents-in-suit at auction, Google has infringed and continues to infringe the patents-in-suit.”

The big threat comes from charges that Google’s “systems, methods, products, and processes for matching search terms with relevant advertising and/or information based on those search terms and other user data” infringe on seven of Rockstar’s patents. The suit claims that Google’s infringement of the patents was willful and seeks damages and attorneys’ fees and costs.

The lawsuit is a serious threat to the Android ecosystem and to Google’s bread-and-butter search business. And it appears that Google is on shaky ground.