Sonos Inc. (NASDAQ:SONO) shares surged 6% in the extended session Thursday after the U.S. International Trade Commission (ITC) banned Alphabet’s (GOOGL) from importing some phones, laptops, and speakers made overseas. The ban follows the ruling that Google has violated as many as five of Sono’s patents.
Chief Legal Officer Eddie Lazarus considered the ruling an “across the board win” for the company and requested that Google “pay a fair royalty for the technologies it has misappropriated.” To avoid a complete ban, Google has 60 days to implement the pre-approved software changes while being prohibited from selling any products that already infringe on Sonos patents.
In turn, Google spokesman José Castaneda said the tech giant would appeal the decision. He said, “we will seek further review and continue to defend ourselves against Sono’s frivolous claims about our partnership and intellectual property.”
After the court ruling, Google said it is making some changes to how a user sets up devices and how the Speaker Group functionality will work moving forward. The tech major said that users will no longer be able to adjust the volume of an entire speaker group and added that some users will now need to download a Device Utility app or DUA, to complete product installation and updates on their network.
In August 2021, Sonos won a preliminary ruling against Google. In a complaint to the ITC, Sonos said it began working in 2013 to integrate Google Play Music into Sonos speakers and provided Google with insight into its proprietary technology. According to Sonos, these insights led Google to copy and integrate the technology into its Google Home speakers.
In the latest trading session, Sonos closed at $28.87. The S&P 500 and The Dow Jones Industrial Average lost 0.1% and 0.47%, respectively, while the Nasdaq lost 0.47%.
As Sonos approaches its next earnings report date, Wall Street will be looking for some positivity, while investors should be on the lookout for any recent changes to analyst estimates.
Morgan Stanley analyst Kathryn Huberty reiterated a Buy rating on Sonos with a price target of $49 last month. The rating implies a 69.73% upside potential to current levels.
To invest in Sonos stocks, visit MEXEM today.
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