GraphOn, a server-based application developer, has filed a lawsuit against Google alleging infringement of four GraphOn patents, according to the Santa Cruz, California-based company. If it wins, not only will Google have to pay up considerable damages but may also have to cough up license fees for past and future usage.
The suit alleges that Google's Base, AdWords, Blogger, Sites and YouTube online services infringe the GraphOn patents. The suit, filed in United States District Court in the Eastern District of Texas, alleges infringement of US Patents 6,324,538, 6,850,940, 7,028,034 and 7,269,591, which GraphOn said, represent its unique method of maintaining an automated and network-accessible database.
GraphOn obtained two of the patents and the applications that resulted in the other two patents as part of its acquisition of Networking Engineering Software Inc. (NES) in February 2005, the company said.
GraphOn has a history of filing suits against companies it believes are infringing on its patents. GraphOn previously had filed a lawsuit against AutoTrader.com in November 2005 claiming infringement on two of the same patents and another suit against Juniper Networks in August 2007 for infringement on some network security and firewall technology patents.
Also, it filed a March 2008 suit against Classified Ventures LLC, IAC / InterActive Corp., Match.com LLC, Yahoo!, eHarmony.com and CareerBuilder. In January 2008, GraphOn reached a license agreement with AutoTrader.com to end that legal dispute.
According to a press release GraphOn suit seeks ''permanent injunctive relief along with unspecified damages''. Google is expected to defend itself against GraphOn in court; a favorable outcome for GraphOn could not only be very expensive for Google, but also enable GraphOn to expand its suit to possibly thousands of websites.
"The number of patents now owned by GraphOn as a result of the NES acquisition has increased to twenty-three, a number that is expected to continue to increase as patent applications on file at the US Patent and Trademark Office mature into issued patents," said Robert Dilworth, CEO of GraphOn, in a statement. "Aggressively protecting the technology represented in these patents is an important part of maximizing their value to GraphOn."
Publicly traded GraphOn reported $2.7 million in sales for the six-month period ended 30 June, up from $2.4 million in the year-ago period. The company lost $1.4 million in the first six months of 2008 (3 cents per share), compared to a $2 million loss (4 cents per share) in the year-ago period. GraphOn shares closed at 25 cents last Friday.