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Oct. 4, 2007

Google has been sued for patent infringement. This is the third time it happens in the last few weeks. The trend seems to be increasing rapidly, and not just with Google.

On September 25, Performance Pricing filed suit against America Online, Google, Yahoo and Microsoft charging the four search companies with infringing upon its patent, "Systems and methods for transacting business over a global communications network such as the Internet."

The lawsuit was filed in the Eastern District of Texas, where a large number of patent cases have been filed in recent years due to the district's perceived friendliness to "wronged" inventors.

Overall, there were 218 patent infringement lawsuits filed in Texas, from January 2004 through April of this year, according to the Coalition for Patent Fairness, a group that counts Google and Microsoft as current members.

Another case in point: In mid-September, Illinois Computer Research sued Google in Illinois' Northern District Court for violating a patented method of navigating through online books.

At the end of August 2007, AOL, Amazon, Borders, Google, IAC, and Yahoo were sued in the same district by Texas-based Polaris IP for violating a patented method of automated e-mail routing.

For its part, Performance Pricing alleges that Google AdWords, AOL Search Marketplace, Microsoft adCenter and Yahoo Search Marketing all violate its patent, which was filed in 1999 and granted two years ago.

Performance Pricing's patent describes a system for competitive bidding. The patent explains "the present invention comprises a business model used to determine the price of goods and/or services to be provided from a seller or sellers to a buyer or buyers. Various forms of electronic competition and/or entertainment are used as intermediary activities between said buyers and sellers to ultimately determine a contract price."

The patent claims to cover a wide variety of activities: video games, electronic board games, crossword puzzles or other word games, sports betting, card games, or any other activity or combination of activities.

Presumably, the plaintiff believes the patent covers Internet ad auctions at the same time...

Google policy counsel and legislative strategist Johanna Shelton and Michelle Lee, head of patents and patent strategy, urged Congress to pass patent reform legislation in a September 4th Google blog post.

Shelton and Lee said "Google and other technology companies increasingly face mounting legal costs to defend against frivolous patent claims from parties gaming the system to forestall competition or reap windfall profits."

On September 7th, the House of Representatives passed the Patent Reform Act of 2007. The Senate is expected to vote on a version of the bill shortly.

If the Patent Reform Act passes the Senate and is signed by the President in its current form, monetary damage awards for patent infringement are likely to decline and venue shopping will be substantially curtailed.

Shelton and Lee added "certain district courts have become notorious for rarely invalidating a patent, and have tilted the balance too often in favor of plaintiffs. We support judicial venue provisions to ensure that patent lawsuits are brought only in district courts with a reasonable connection to the case."

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Source: Yahoo News