AOL Agrees to Settle Part of Vringo Patent Case

08/06/2012| 10:31am US/Eastern

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   By Ben Fox Rubin 
 

AOL Inc. (>> AOL, Inc.) agreed to settle part of a patent dispute brought by video-ringtone company Vringo Inc. (>> Vringo, Inc.), giving Vringo another potential win in its ongoing lawsuit against some of the biggest names in the technology sector.

Details of the settlement were confidential and Vringo declined to comment.

Vringo last month completed a merger with intellectual-property firm Innovate/Protect, a company that filed a patent suit against AOL, Google Inc. (>> Google Inc), IAC/InterActiveCorp. (>> IAC/InterActiveCorp), Gannett Co. (>> Gannett Co., Inc.) and Target Corp. (>> Target Corporation) last year. The company acquired eight patents from Lycos and claims two of those patents were infringed.

Google is the main defendant in the case, as the lawsuit focuses mostly on how Google ranks advertising on its search results. Gannett and Target were included as Google customers, and IAC and AOL were included as Google partners.

As part of the lawsuit, AOL was separately accused of potentially infringing the same two patents for one of its own search products, called Advertising.com. The settlement resolves that part of the case, but AOL will remain a defendant in the main portion of the lawsuit.

The deal comes about six weeks after a Markman hearing held for the case came out favorably for Vringo. A Markman hearing is used to define a handful of disputed terms in a lawsuit, in this case, technical terms like "collaborative feedback data" and "a scanning system."

A trial date has been set for Oct. 16. Vringo didn't specify how much in damages it is seeking, but has called for past and future royalties for the potential infringement, which involves Google's primary way of making money. The patents expire in 2016.

In May, Vringo posted a wider first-quarter loss, as revenue shrank to $106,000 and total operating costs jumped sharply, mostly on merger expenses.

Vringo's stock has quadrupled this year, after tumbling in 2011, amid the merger, as well as an investment from tech investor and Dallas Mavericks owner Mark Cuban. Shares were down 2.3% recently at $3.05.

AOL's shares were up 1.3% recently at $33.05.

Write to Ben Fox Rubin at ben.rubin@dowjones.com

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