Google infringed on audio patents held by Sonos Inc. SONO -0.10% and is barred from importing some of its Nest audio speakers and other violating products, a U.S. trade agency ruled on Thursday.
The U.S. International Trade Commission found the Alphabet Inc. GOOG -0.07% -owned search giant violated five of Sonos’s patents related to synchronizing audio, adjusting volume and connecting to Wi-Fi. The court determined that Google should stop importing products that used those patents.
Sonos Chief Legal Officer Eddie Lazarus called it an “across the board win” for the company and called on Google to “pay a fair royalty for the technologies it has misappropriated.”
Google spokesman José Castañeda said the tech giant would appeal the decision. “We will seek further review and continue to defend ourselves against Sonos’s frivolous claims about our partnership and intellectual property,” he said.
The ruling will have limited effect on Google’s product line because the company has revamped the design of some previously infringing products such as its Pixel smartphones and Nest speakers. The court vetted those changes and ruled that the overhauled products can be shipped without violating the import ban.
Still, the final decision could raise pressure on Google to strike a licensing deal with Sonos for a portfolio of patents. Growing competition in speakers from tech giants such as Amazon.com Inc. and Apple Inc. have squeezed Sonos’s sales, leading the company to look beyond its legacy hardware business by licensing its audio patents to rivals.
Analysts estimate that such an agreement with Google would net Sonos as much as $50 million annually. The audio company reported $1.34 billion in sales for its most recent fiscal year.
Shares of Sonos rose 5.65% in after-hours trading. Alphabet shares were up 0.3% after hours.
The patent dispute has played out amid rising regulatory pressure on tech giants, as lawmakers, regulators and rivals accuse Google, Apple and Amazon of using their financial might and powerful platforms to curtail competition. Sonos has helped lead an attack against those larger players, testifying before the Senate that they subsidize products to gain market share and further their dominance.
Sonos made the ITC case one of its signature efforts to combat Google’s rise in smart speakers. In its complaint, it said that it began working in 2013 to integrate Google Play Music into Sonos speakers and provided Google with deep insight into its proprietary technology. It accused Google of copying that technology and integrating it into its Google Home speakers.
It won a preliminary ruling in the case in August last year. The company also filed complementary patent-infringement lawsuits in U.S. District Court in California and later in Texas. Those cases are pending.
Google countersued Sonos last June for patent infringement in California federal court. Its lawsuit claims Sonos infringed on five Google patents, including ones related to audio and search. The case is pending.
The tit-for-tat tussle over patents has become a regular strategy for tech players fighting to maintain their leadership in a category. Apple sued Samsung Electronics Co. in 2011, accusing it of copying the iPhone. Beginning in 2017, Qualcomm Inc. and Apple engaged in a multiyear battle over semiconductor patents in courts around the world.
Wall Street analysts have largely shrugged off the Sonos dispute’s potential impact on Alphabet, which generates more than 80% of its revenue from digital ads and has $142 billion in cash.
Write to Tripp Mickle at [email protected]
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Appeared in the January 7, 2022, print edition as ‘Panel Rules Google Infringed Patents.’
