Google Transfers 2.7 Million Shares to Yahoo in Settlement of a Search Patent Dispute

In a move that highlights the value of patents in the field of internet software tools, Google recently settled claims by Yahoo that Google's advertising ranking software violates a patent issued to Yahoo subsidiary Overture Services Inc. According to an article in The New York Times, the payment of 2.7 million Shares of Google will also help settle a dispute between the companies regarding an earlier investment. If the Google IPO proceeds as anticipated, the shares will be valued at approximately $300 million. The patent at issue, US Patent 6,259,361 (and perhaps also US Patent 6,078,866), relates to a revenue generation scheme by which advertisers are ranked according to what they are willing to pay on a hit-by-hit basis for the association of their web site with the search for a particular word or phrase. The huge settlement brings renewed focus on the difficulty or impossibility of obtaining similar software or business method patents in Canada, as compared to the US. Are inventions of this type simply the implementation of known algorithms over the Internet, or are they new and useful arts or processes worth protecting? The subject-matter consideration is an issue separate from whether the business method or software tool is new and inventive. The corresponding Canadian application (CA 2,375,132 for which examination was requested on November 28, 2001) has not issued as a patent. In view of the high value being placed on software and business method inventions in the marketplace, pressure may build on Canadian courts and legislators to adopt a more inventor-friendly position regarding patentable subject matter. For the article by Hansell in The New York Times, "Google and Yahoo Settle Dispute over Search Patent", visit: http://www.nytimes.com/2004/08/10/technology/10search.html. Summary by: Nicholas Whalen