Patent Deals Put Nokia in the Middle of Vringo’s Lawsuit Against Microsoft

Yesterday, Vringo, Inc. announced that it had filed a patent infringement lawsuit against Microsoft through a wholly owned subsidiary, I/P Engine, Inc. The complaint involves US 6,314,420 and US 6,775,664.

Last November, I/P Engine obtained a favorable judgement against AOL, Google, IAC, Gannett, and Target over these same patents.  The jury awarded I/P Engine approximately $30 million, as well as a 3.5% running royalty applicable to the defendant’s search-based advertising revenue through the remaining term of the patents, which are set to expire in 2016.

Last August, Vringo acquired about 500 patents from Nokia for $22 million.  The deal also includes a 35% royalty to Nokia for any revenues generated by Vringo in excess of $22 million from these patents.

In addition, Nokia and Microsoft are strategic partners, where Microsoft provides operating system technology to Nokia, and where Nokia uses Microsoft search and ad services in its devices.  In return, Nokia receives $250 million in quarterly “platform support” payments from Microsoft.

I/P Engine’s lawsuit against Microsoft pits Nokia in the middle of a patent battle between two of its friendly partners.  It will be interesting to see what influence, if any, Nokia’s involvement with each of these companies will have on the pending lawsuit and any possible settlement.

On one hand, the patents asserted by I/P Engine against Microsoft were not acquired from Nokia (they were originally owned by Lycos).  On the other hand, Nokia certainly has an interest in the success of Vringo’s licensing/litigation business model, due to its potential 35% stake in any revenues generated from the patents acquired from Nokia.

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