By now, most of you probably have read Daniel's article (Daniel B. Ravicher) Vringo Verdict And Future Royalties Against Google On Shaky Ground.
In the article, Daniel insists that Vringo (NASDAQ:VRNG) received a verdict for 31M. However, it needs to be clear that this was a jury verdict, and the final verdict is yet to come. The final verdict is the verdict given by the judge and the only one that matters. The judge is the person in charge when it comes to awarding damages. However, the jury's verdict is definitely taken into account.
Moreover, Daniel in his article mentions that the jury has not awarded future damages. That is correct because the judge is the only one that has the power to do so. On the other hand, the jury has awarded an ongoing 3.5% royalty rate, and the judge will take that into account if he decides to award future damages. The reason for this is that the judge was the one who placed that question for the jury. As mentioned in one of my previous articles, judges are very smart people. He placed that question for the jury to see what a reasonable future running royalty rate would be.
Further, it has been mentioned countless times that there seems to be a mistake in the jury's calculation for damages. The judge will certainly address this issue and decide what he believes to be a reasonable award. So far, Google (NASDAQ:GOOG) has argued that the damages received by the other defendants are too large. However, Vringo will of course argue that it works the other way around and Google's damages are too little in comparison to the rest of the defendants and should pay more. Vringo's chances look better at this point since all the other defendants were based on the same calculation. The only one which is different is Google's and for that reason I believe it is the incorrect one. Also, when looking at the jury verdict there were three separate questions about damages.
A. "If you have found any claim of the '420 patent or the '664 patent to be both valid and infringed by Google, should reasonable royalty damages be based on a 'lump sum royalty' or a 'running royalty'? (CHECK ONLY ONE)
LUMP SUM ____
RUNNING ROYALTY ____
The running royalty was checked
B. If you have found that damages should be based on 'running royalty', what should be the rate for that running royalty? ANSWER AS PERCENTAGE
Running royalty rate: 3.5%
C. If you have found any claim of the '420 patent or the '664 patent to be both valid and infringed by Defendants, what sum of money, if any, if paid now in cash, would reasonably compensate I/P Engine for any defendants past infringement? ANSWER IN DOLLARS AND CENTS, IF ANY, AND FOR EACH DEFENDANT
Under each of the defendants received an amount including Google.
It seems clear to me that these questions are very different. The first two focus on a running royalty and damages in general. On the other hand, the third question clearly mentions PAST infringement and amount in cash to be paid now. Again the judge did not have to place the running royalty question there, so he did it with a purpose. His intent, as well as the jury's, is clear that future damages should apply, and they should be based on a 3.5% running royalty.
Further, in regards to future royalties, the judge will do what he thinks is reasonable. The judge probably thinks that the jury made a mistake in past damages. Also there is a clear intent to have a running royalty rate of 3.5% and for that reason Vringo should get the 3.5% on going royalty rate in future damages based on the 20.9% add revenue increase.
Hence, this illustrates that the battle is not over. The judge has not given the final verdict so at this point the game is still on. What has changed? Nothing really has changed. Google will keep fighting to try pay as little as possible and Vringo will try get what it deserves. I expect the judge to rule before the end of the year and clarify all of our concerns.