A federal jury in Texas has found that Google’s license with a patent owner prohibits that patent owner from suing Google’s customers for infringement of the licensed patents.

Beneficial Innovations Inc., a Las Vegas-based non-practicing entity (NPE), had sued Google and other defendants in 2007 and 2009 alleging infringement of Beneficial’s patents for online advertising.

One of the patents, filed in 2000 and issued in 2009, is for

A networked system … for presenting advertising during on-line interactions between a user and a service of a network (e.g., the Internet…). Advertisements (ads) are presented to a networked user unrequestedly during user interactions with the service. The user can activate the ads (via hyperlinks) for receiving additional advertising. …

In 2010, Google and Beneficial entered into a license for the two patents at issue. Google and its YouTube subsidiary were then dismissed from the patent infringement case.

The license agreement covered Google’s customers, but “only to the extent” that the customers’ activities would constitute direct or indirect infringement by Google but for the license.

However, less than a year after the settlement Beneficial sued a number of companies, including five Google customers, for infringement of the same patents.

The Google-Beneficial patent license had left open the issue of whether Google’s customers’ specific activities were covered by the license.

Google intervened in the suit against its customers, claiming that it violated the licensing agreement. However, the Google-Beneficial patent license was unclear on whether it covered the specific activities challenged by Beneficial in the latest suit. This was the question the jury decided in Google’s favor.

Google sought only nominal damages in the amount of one dollar, as it was primarily interested in relieving its customers of the burden of the lawsuit.

Although the case had a positive outcome for Google, it is possible that it could have been avoided with a more carefully drafted license agreement that spelled out the full range of potential uses by Google customers.

How Can I Help?

If you are involved in (or anticipating) patent litigation, and want to enter into a settlement that protects your customers’ rights,  please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +