Appeals court hands Google patent case setback

By Diane Bartz

WASHINGTON (Reuters) - A federal appeals court handed Google Inc <GOOG.O> a setback in a patent fight on Wednesday, tossing out part of a summary judgment in the Web search engine's favor in a lawsuit filed by Hyperphrase Technologies, LLC.

Hyperphrase Technologies, LLC and Hyperphrase Inc had filed suit in Wisconsin saying that Google infringed on four patents used to make AutoLink and AdSense. The district court in Wisconsin tossed out the case, granting summary judgment in Google's favor.

But the U.S. Court of Appeals for the Federal Circuit said it partially upheld the summary judgment, partially vacated it and remanded the case.

The appeals court ruled that Google's immensely profitable AdSense did not infringe on Hyperphrase's patents. It handed down a split decision on AutoLink, agreeing that Google did not infringe, as claimed, on one of the Hyperphrase patents. But it vacated a summary judgment in Google's favor on two others and sent it back to the Wisconsin district court.

"The district court's grant of summary judgment is affirmed in part and vacated in part, and the case is remanded," the court wrote in its decision.

Michael Kwun, Google's managing counsel for litigation, said he was pleased with the portion of the ruling that dealt with AdSense.

"We're very pleased that the Federal Circuit agreed that AdSense does not infringe any of Hyperphrase's patents. We continue to believe the remaining claims in the lawsuit are without merit, and will vigorously defend against those claims," said Kwun.

The case is one of dozens that Google is fighting. Like many high tech firms, it regularly faces patent infringement lawsuits.

The ruling was posted on the Internet at http://www.cafc.uscourts.gov/opinions/07-1125.pdf.

(Reporting by Diane Bartz, editing by Richard Chang)