A case that sparked debate over the murky backgrounds of many IP plaintiffs came to an unceremonious end on Tuesday, when an appeals court refused to revive patent infringement claims targeting Google Inc. over its lucrative Adsense program.
The U.S. Court of Appeals for the Federal Circuit affirmed an earlier decision tossing the case, which was brought by a shell company called Suffolk Technologies LLC. The Federal Circuit’s 16-page decision is a win for Google’s lawyers at Keker & Van Nest, led by Robert Van Nest and Steven Hirsch.
Suffolk sued Google and AOL Inc. in June 2012, claiming that the “snippets” of text that appear with the companies’ Web search results infringed a patent (U.S. Patent 6,081,835) related to Internet server control. AOL settled last year.
Google ultimately beat the case by arguing that Suffolk’s patent was invalid, but its initial strategy was to target Suffolk itself. As Keker established, Suffolk is a subsidiary of IPValue, which was formed, indirectly, by a joint venture of Goldman Sachs & Co., General Atlantic Partners, and the Boston Consulting Group. IPValue acquired the ’835 patent from BT Group unit British Telecom in 2011, after IPValue had helped BT monetize several other patents. In exchange for the ’835 patent, BT got a 50 percent stake in any proceeds from future licensing and litigation. BT also filed its own lawsuit against Google in December 2011, claiming a wide range of Google products infringed six of its patents.
In an October 2012 motion to dismiss, Google and AOL argued that Suffolk lacked standing to sue. BT, they argued, was the true owner of the ’835 patent, and had merely (and improperly) granted Suffolk a “hunting license” to extract money from the defendants.
The motion failed to persuade U.S. District Judge T. S. Ellis III in Alexandria, Va., who sided with Suffolk Technologies and its lawyers at McKool Smith in December 2012. But Google’s argument gained traction with many critics of so-called patent trolls, and it spotlighted the practice of established companies creating shells to assert allegedly dubious patents.
Google had better luck in the case in April 2013, when Judge Ellis ruled that key patent claims asserted by Suffolk were predated by a newsgroup posting that appeared nine months prior to the patent’s coverage date. The judge entered final judgment for Google and dismissed the case, teeing up the appeal.
On Tuesday, the Federal Circuit found that Ellis had made no errors in claims construction and affirmed his decision knocking out Suffolk’s case.
McKool Smith’s Joel Thollander, who represents Suffolk, told us his client was disappointed in the ruling and considering its options.
Keker & Van Nest’s Hirsch referred us to a Google spokesman, who didn’t immediately respond to our call for comment.
Google fired back at BT with its own infringement claims in U.S. district court in Santa Ana, Calif., last year. That case— Google’s first under its own name—wound down in February when the companies reached a confidential settlement. White & Case represented Google in the California case. BT had Proskauer Rose.