A U.S. appeals court on Friday rejected patent claims brought by a Vringo Inc subsidiary against several companies including Google, sending Vringo shares plummeting.
Vringo subsidiary I/P Engine had won a jury verdict of infringement against Google, finding that Google's AdWords platform infringed two patents on filtering Internet search results. The jury awarded over $30 million.
However, the U.S. Court of Appeals for the Federal Circuit on Friday declared both patents invalid in a split ruling. Vringo shares were trading at 92 cents in afternoon trading, down over 70 percent.
In a statement, Vringo said it is evaluating its options.
Catherine Lacavera, director of IP litigation for Google, said "we always believed strongly in our case, and we are pleased with this decision."
In rejecting the Vringo patents, a three-judge Federal Circuit panel in Washington voted 2-1 that the invention was obvious to anyone skilled in the field. The commercial success of Google's Adwords platform is not evidence to the contrary, the court ruled.
Judge Raymond Chen dissented. In a separate concurrence, Judge Haldane Robert Mayer delved into the current debate over how much patent protection should be accorded to software.
Recent Supreme Court case law restricting software patents should make Vringo's inventions ineligible for patent protection regardless of whether they were obvious, Mayer wrote.
Since Vringo's patents do not improve the functioning of a computer itself, Mayer wrote, "unnecessary litigation, and nearly two weeks of trial and imposition on citizen jurors, could have been avoided."
The case in the Federal Circuit is I/P Engine vs. Google et al., 13-1307.
(Reporting by Dan Levine; Editing by James Dalgleish)