The “Rockstar” Lawsuit: Why Digital Advertisers Should Pay Attention

Patent wars between smartphone manufacturers have been waging fiercely since smartphone usage began to surge in 2009. Since then, lawsuits and counter-lawsuits have been escalating to what is now the most brutal attack yet on Google by its major competitors. This latest patent claim expands beyond mobile technology to include Google’s main source of revenue, AdWords. Digital advertisers should be aware and follow the news attentively – the landscape of paid search and display advertising may change drastically depending on the outcome of this case.

Apple, Microsoft, Blackberry, Sony and Ericsson formed what is now Rockstar Consorium Inc. in 2011. They bid against Google for a trove of over 6,000 technology patents left behind by the now-bankrupt company Nortel. After an initial bid of $900 million, the auction soared to the amount of $4.5 billion with Rockstar as the victor. According to the case file, “[d]espite losing in its attempt to acquire the patents-in-suit at auction, Google has infringed and continues to infringe the patents-in-suit.”

Ultimately, this is a battle for your advertising dollars. These patents-in-suit revolve around Google’s method of matching a user’s search request and user data to generate relevant advertising – the foundation of AdWords. No estimates or figures have been released yet, but one can only imagine how much monetary damage Rockstar is seeking. In 2012, Google surpassed $50 billion in revenue with 95% coming from advertising. Since SEO does not deal with paid advertisements, the claims do not involve organic search results and page ranking. However, if Google fails to win this lawsuit, the Yahoo Bing Network (a Microsoft partnership and AdWords’ main competitor) is likely ready and waiting to take its place as the new digital advertising giant. Could Rockstar’s eventual goal be a future of BingAds on Google search results and display network?

Samantha Barnes is the SEO and Content Manager at Flying Cork.