US International Trade Commission finds Google infringed on Sonos patents
An international trade court ruled on Thursday, January 6, 2022, that Google had infringed on five audio technology patents held by the speaker manufacturer Sonos and that the company was not permitted to import products into the United States that infringed on Sonos’s intellectual property.
It brings to a close a two-year investigation into an intellectual-property dispute by the United States International Trade Commission, a quasi-judicial body that decides trade cases and can prevent the import of goods that violate patents.
According to Sonos, imports of Google products that infringe on the speaker company’s patents should be barred by the International Trade Commission (ITC). Google Home smart speakers, Pixel phones and computers, and the Chromecast streaming video device are among the products in this category. Those products are manufactured in China and shipped to customers in the United States.
The import ban will be in effect for 60 days after it is announced. In the meantime, the matter will be subject to a presidential investigation. The final ruling upheld a preliminary finding made by a commission judge in August, which stated that Google should be subject to the import ban. Following that initial decision, the full commission convened to consider whether or not to accept or overturn the decision.
Google Violated Tariff Act
The Federal Trade Commission found that Google had violated the Tariff Act of 1930, which is intended to prevent unfair competition through actions such as the importation of products that infringe on United States patents, trademarks, or copyrights, among other things. A cease-and-desist order was also issued against Google by the commission.
What is the Tariff act of 1930
The Tariff Act of 1930 (codified at 19 U.S.C. ch. 4), also known as the Smoot–Hawley Tariff or the Hawley–Smoot Tariff, was a piece of legislation that was implemented in the United States to protect against unfair trade practices. It was signed into law by President Herbert Hoover on June 17, 1930, after being sponsored by Senator Reed Smoot and Representative Willis C. Hawley. The act increased tariffs on more than 20,000 imported goods in the United States.
When duty-free imports were excluded from the tariffs (see Tariff levels below), they were the second-highest in United States history, only surpassed by the Tariff of 1828 (see Tariff levels below). The Act, as well as retaliatory tariffs imposed by America’s trading partners, were major contributors to the 67 percent reduction in American exports and imports that occurred during the Great Depression. A broad consensus exists among economists and economic historians that the passage of the Smoot–Hawley Tariff exacerbated the effects of the Great Depression.
Response from Sonos
According to Eddie Lazarus, the chief legal officer of Sonos, “We appreciate that the International Trade Commission has definitively validated the five Sonos patents at issue in this case and ruled unequivocally that Google infringes on all five.” A win across the board like this is exceedingly rare in patent cases, according to the author.
In reference to the recent legal ruling, Sonos claims that if Google refuses to pay a licensing fee, the company will be forced to “degrade” its speaker technology. This includes having Google pay a fair royalty for use of the technology on all devices including the nest hub display. It will be interesting to see if they comply or be forced to eliminate product features on the devices that are rolled out.
Response from Google
An official from Google, José Castaeda, stated that they disagreed with the decision, but that it would work to ensure that customers’ use of its products and the company’s ability to sell and import devices were not disrupted as a result of the decision. A preliminary ruling issued in August approved alternative product designs that work around patents, and Google said the commission did not contest this decision on Thursday.
Sonos also has two patent infringement lawsuits against Google pending in federal court against the company. The first, filed in January 2020 in the United States District Court for the Southern District of California, was stayed pending a decision by the International Trade Commission because the cases involve overlapping patents. The second case, which involves a different set of patents, is currently pending in the United States District Court for the Northern District of California in San Francisco. Google stated: Commission, and will “continue to defend ourselves against Sonos’ frivolous claims about our partnership and intellectual property”.
Financial Impact of the Ruling
There is a huge financial impact to the ruling outside of the damages owed Sonos. Due to the fact that the import ban is unlikely to have a significant impact on newer products that use different technologies, the ruling appears to have a limited impact on Google’s business. It also has no effect on Google’s primary source of revenue, online advertising.
In the financial statements of Google’s parent company, Alphabet, sales of hardware products are grouped with “other” non-advertising businesses, such as the sale of mobile applications and digital media. Alphabet’s revenue from this category accounted for 18 percent of total revenue in the third quarter, which ended in September this year.
Sonos and Google Working together in 2013
The company Sonos claims that it began sharing details of its technology with Google in 2013, when the two companies began working together on a joint project. For a long time, Google was not a competitor to Sonos, but it began to move into the company’s territory in 2015, first with a small device for streaming music and then with its Google Home speaker in 2016.
Initial sharing of designs
After partnering with Google in 2013, Sonos provided Google engineers with detailed diagrams of how its speakers interacted with one another over a wireless connection. Google did not exist as a competitor at the time.
Two years later, Google released a small device that could be used to convert an old speaker into a wireless speaker, in a similar fashion to Sonos’s original product. A year later, Google released its own wireless speaker, the Google Home, which is still in production. The device, which was marketed in conjunction with Google’s talking virtual assistant, quickly outsold Sonos’ offerings in terms of sales.
Initial discovery by Sonos
Sonos purchased the Google devices and employed a technique known as packet sniffing to monitor the way the speakers communicated with one another. They discovered that Google’s devices were using Sonos’s approach to solve a variety of technological challenges, which they had not previously realized. Sonos executives claimed that they had discovered that Amazon’s Echo speakers were also using Sonos technology in their designs.
Sonos notified Google that it was infringing on its intellectual property in August 2016. Google didn’t have much of a response. Sonos executives claim that as Google released more products, it began to infringe on more patents. Within three years, Sonos informed Google four more times, eventually providing a list of 100 patents that it believed Google had violated in violation of their terms. Google responded by claiming that Sonos was also infringing on its patents, according to Sonos executives, though it did not provide any further details.
As a result of Sonos delivering a proposed model for Google to pay licensing fees, Google responded with its own model, which resulted in Google paying virtually nothing, according to company executives.
Sonos claims more patents have been violated
Sonos claimed that Google was infringing on more than 100 of its patents and proposed a licensing agreement with the company. They were unable to reach an agreement between the two companies.
How many Sonos Patents does Sonos hold?
Sonos owns a massive amount of patents.
Is Google a Victim of its Own Success?
The lawsuits are a byproduct of the sprawling businesses of today’s tech behemoths, in part because of their size. Google began as a search engine more than two decades ago and has grown into a global brand. Today, it manufactures a diverse range of hardware products, including smartphones, computers, and connected home devices, amongst other products. It makes money by selling computing infrastructure to other businesses and by providing high-speed internet connectivity to ordinary consumers.
Almost with every expansion of its business, Google encroaches on the territory of smaller companies that did not anticipate having to compete against a behemoth with seemingly limitless resources.
Sonos a Pioneer
Sonos inc is a pioneer in the development of home speakers that stream music or podcasts from smartphones and that can be wirelessly networked together to play songs in multiple rooms at the same time. Google, Amazon, Apple, and Facebook, on the other hand, have all entered the market in recent years, seeing smart speakers as a means of introducing voice-based assistants into millions of homes around the world, as they have done with smartphones. Sonos Radio Commercial.
Sonos speakers have voice control systems built-in, allowing users to quickly create speaker groups. These speaker groups can span multiple rooms using different versions of Sonos speakers even the Sonos sub. They can use technology like the group volume controller to control the speakers in the house. This provides the customer with a unique listening experience.
As the alphabet company continues to expand into different markets there is a high probability that they will continue to be sued by the smaller companies. These companies from devices that play music to a wide range of software platform.
With the ruling in favor of Sonos, customers are wondering if they are going to have to sacrifice consumer experience or if the devices will continue functioning if they stick with google home devices. It is also unclear the financial impact related to the decision to eliminate product features on these devices or future rulings.
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