By: Veronica Dohr
Introduction
On March 1, 2022, The Verge published an article based on an interview with Patrick Spence, Sonos’ CEO, and Eddie Lazarus, Sonos’ chief legal officer, discussing a recent patent infringement case between Sonos and Google. Although Sonos claims that Google has infringed on approximately 150 of its patents, the case at hand centered on five audio technology patents held by Sonos. After a two year long legal battle, the United States International Trade Commission ruled that Google did infringe on the patents and violate Sonos’ intellectual property rights. As a result, the physical devices can stay in circulation, but Google must remove features of their devices that operate based on technology that violates the patents. This post will discuss the relationship between Sonos’ and Google, the expansion of Big Tech in recent years, the specific facts and implications of this case, and the fact that even though this case may be over the story between Sonos and Google is long from finished.
Background Information on Sonos
Sonos began innovation on wireless multi-room audio at the turn of the 21st century. The company was founded in 2002 and in 2005 the company brought its first commercial products to market. Since then, Sonos has continued to develop new technology in the wireless multi-room audio system space with more that 750 patents registered with the U.S. Patent & Trademark Office to prove it. Sonos has partnered with over 100 companies that offer music services and their products work with the three major voice assistants: Amazon Alexa, Google Assistant, and Apple Siri. Shortly after the initial product line entered the market, Sonos began marketing their products to international consumers starting in the United Kingdom. In December 2013, Sonos raised $118 million in venture funding and eventually went public in August 2018. At its Initial Public Offering, the company was valued at just under $1.5 billion. Today, Sonos is valued at $1.77 billion. While these are impressive accolades, Sonos is still a relatively small tech company. Comparatively, Apple, Google (Alphabet), and Amazon are valued at $2.502 trillion, $1.291 trillion, and $1.180 trillion, respectively.
The Relationship Between Sonos and Google
Sonos and Google began working together in 2013. In the beginning, the two companies’ working relationship was focused on integrating Sonos’ multiroom speakers and Google’s Play Music service. Then, in 2015, Google introduced its first music streaming device which was quickly followed by the Google Home speaker in 2016. Google’s introduction of its own speaker in 2016 eliminated its need to outsource to companies like Sonos. The now defunct partnership was the basis for the alleged infringement claims because the company’s shared information when working together. In an attempt to resolve the alleged infringement issues without litigation, Sonos proposed a licensing deal but the two companies could not reach an agreement.
The Expansion of Big Tech
Given the breadth of the current goods and services that Google, through its parent company Alphabet, provide, we seldom remember that Google was once simply a search engine. At its conception, the reach of Google’s future business ventures was unfathomable. The partnership between Google and Sonos was meant to be a collaboration between two companies that had created technology that complimented each other. The expansion of technology companies outside of their area of origin is not unique to Google; it is rampant throughout the technology industry. Amazon, infamously, started as an online bookstore. The result is that smaller companies are repeatedly finding themselves in conflict – whether it be legal or financial – with companies that have more money and resources.
Sonos’ Lawsuit Filed with the International Trade Commission
The United States International Trade Commission is a quasi-judicial body that decides trade cases and can block the import of goods that violate patents. The commission has jurisdiction over this matter because, while both Sonos and Google are based in the United States, Google’s products that were at issue in the case are manufactured in China and then shipped to the United States. The commission can prevent the import of products that infringe on U.S. patents, trademarks, or copyrights to prevent unfair competition because of the Tariff Act of 1930. The International Trade Commission determined that Google did infringe on the patents and, therefore, would no longer be allowed to import those devices to the United States.
After the commission’s decisions, Google proposed, and the commission accepted, a plan for Google to eliminate product features to circumvent the importation ban. This may be inconvenient for consumers; however, the result will be insignificant to Google (Alphabet)’s bottom line. The initial appeal for Google to enter the speaker market was to increase recognition of its Google Assistant voice technology and to collect user information to use to increase targeted ad revenue – where the company makes most of its money.
Going Forward
The Future of the Relationship Between Sonos and Google
Sonos still has two additional patent infringement cases pending against Google. The first case was filed in January 2020 in Los Angeles in the United States District Court for the Central District of California was stayed pending the results from the International Trade Commission because the two cases involved overlapping patents. The second case involves a different set of patents and is ongoing in the United States District Court for the Northern District of California in San Francisco. Additionally, after the International Trade Commission decision, Google has retaliated and filed a lawsuit in federal court in the United States District Court for the Northern District of California and said it would file a related complaint at the International Trade Commission alleging Sonos is violating several of Google’s patents with its new voice-assistant technology. Between the two companies there is currently litigation taking place in California, Canada, France, and the Netherlands. Sonos has since accused Google of using additional litigation as an intimidation factor to force Sonos to drop the issue before they run out of money to continue litigating. Overall, the future for Sonos and Google includes a lot of time in court and potentially a solution that leave neither side truly satisfied.
Amazon: Patent Infringement Claims Involving Other Big Tech Companies
As mentioned above when discussing the expansion of technology companies, Google is not the only culprit here. In late 2020, Vocalife, a software company that focuses on audio technology based on Plano, Texas, filed suit in the United States District Court for the Eastern District of Texas against Amazon for patent infringement for a single patent concerning Amazon’s Echo products. Vocalife was seeking compensation for Amazon’s alleged infringement. The district court initially found for Vocalife; however, the Federal Circuit reversed the holding stating on the basis that Vocalife failed to prove the infringement claims. The two cases seem similar on their face: both involve audio patents held by a smaller company being alleged infringed with the use of a larger technology company’s speaker. In the case against Google, the International Trade Commission found that there was direct infringement on the patent. Whereas, here, the court was deciding whether Amazon indirectly infringed on Vocalife’s patents by offering to sell and instructing buyers on the use of the Accused Products. Even so, these two situations set up an interesting case study for which type of infringement cases against Big Tech companies may be successful and what courts or avenues of relief will offer the most success. We may be able to see some of these theories being tested in the near future because in addition to the claims against Google, Sonos also believes that Amazon is infringing on its patents. However, company executives did not believe it wise to attempt to take on two tech giants at the same time.
Will Additional Patent Protections or Antitrust Regulations Come From This?
Sonos, and other smaller technology companies, stand no chance in the long run without some sort of outside assistance. Without the monetary and resource imbalances present in the case, patent infringement cases are still notoriously hard to win. Sonos’ success with the International Trade Commission was a huge first step, but that victory is still the exception not the rule. Sonos potentially felt embolden to take on one of the technology industry’s biggest companies due to the increased public pressure and supposed interest of politicians to increase regulations on Big Tech. It is Sonos’, and presumably many others, hope that antitrust laws are modernized for the digital age to allow smaller technology companies to compete. This case was just the first step.