"The Trial" between Vringo (VRNG) and Google (GOOG) is about halfway done, with Vringo having rested its side of the case today and Google now having a chance to provide its defense to Vringo's patent infringement claims.
While the trial is ongoing, there have been several significant occurrences along the way, which can be read about in great detail on my Seeking Alpha Instablog. The following significant points bear noting at this stage, as they are relevant to an evaluation of Vringo's likelihood of success.
1. Vringo Has Established a Prima Facie Case for Liability
An important milestone in a trial is for the plaintiff to establish sufficient evidence to constitute a prima facie case. A prima facie case merely means that enough evidence has been established in order to support a jury verdict in the plaintiff's favor. This does not mean that the jury will return a verdict for Vringo, but rather, that there would be enough evidence in the record to support a favorable verdict if the jury is convinced by the evidence.
We have previously discussed the fact that this case presents a classic "battle of the experts." In this regard, Vringo's liability expert, Dr. Ophir Frieder, testified very clearly last week and early this week that his review of Google's own documents intended for public and internal use -- as well as his review of the Lang patents -- and Google employees' pretrial testimony leads him to conclude that Google's AdWords system infringes on Vringo's patents.
Frieder dotted all the i's and crossed all the t's during his testimony in order to establish an evidentiary record to support Vringo's various infringement claims. Immediately after Judge Jackson qualified him as an expert in the case, Frieder commenced his testimony with the very concise statement that "I am convinced that the defendants infringed." He then set about, through the use of charts and checklists, to prove Google's infringement, element by element.
It is impossible to evaluate the jury's response to Frieder's testimony, but it is an important milestone in the case for the plaintiff to know that it has established a legally sufficient prima facie case that can be handed to a jury for a decision.
2. Judge Jackson Refused to Grant Google's Motion for Judgment as a Matter of Law
Upon Vringo's announcement to the court today that it rests its side of the case, Google made a motion to the court for entry of judgment in its favor, as a matter of law. A Motion for Judgment as a Matter of Law is a procedural motion, in which Google asserts that Vringo has not presented sufficient proof to allow its case to go to a jury, and that Google should have immediate judgment. It is similar to a renewal of Google's earlier motion for summary judgment, but made after Vringo's case in chief has been concluded. Judge Jackson refused to grant Google's motion. While this was predictable, it suggests that Judge Jackson is also of the view that Vringo has presented sufficient evidence to support a verdict in its favor. Again, this does not mean that the jury must return a verdict for Vringo; it just indicates that there would sufficient evidence to support such a verdict if the jury finds the evidence to be sufficiently convincing.
While Google can certainly revisit this motion sometime in the future, Judge Jackson's refusal to grant it today means that Google is going to have to present its defense to the jury. It appears that the writing is very much on the wall that Google will not be able to avoid having this case put in the jury's hands for a decision. If Google chooses to raise this motion again in the future, I expect that it will be denied yet again.
3. Google's Damages Evidence Has Been Further Restricted
As you know from my previous articles concerning Judge Jackson's disposition of the MILs, much of Google's damages evidence concerning alleged comparable patent purchase/license agreements was excluded from trial on the basis that it was not comparable to the issues in this case. However, the court did not exclude evidence of two such agreements -- namely, Google's agreements with Disney and Carl Meyer. Google seeks to use these agreements to show that a fair royalty for use of the patents would be lower (much lower) than the award Vringo is seeking.
Yesterday, during the testimony of Vringo's damages expert Dr. Becker, Google cross-examined him on the issue of Google's patent purchase and sale agreement with Disney, as well as the pricing of that agreement. Vringo then made a motion to strike this cross-examination, because it appears that Google will not be able to show that the Disney agreement is comparable to the Lang patents, thus placing the Disney agreement in the same category as the other Google agreements that were excluded pursuant to Jackson's pretrial MIL orders. Jackson agreed, and instructed the jury that the evidence Google had presented on the Disney agreement during its cross examination of Becker is "stricken," and that "it is not proper testimony that you may consider in deliberations and trying to determine what the appropriate royalty should be in this case."
In my view, not only does this further restrict Google's efforts to present an alternative damage calculation, but it also enhances Vringo's and its experts' credibility, while it reduces Google's credibility with the jury.
4. Mid-Term Trial Report
If you are a Vringo bettor, you have to be encouraged by the trial proceedings so far. Vringo has not had any significant trial setbacks, and its evidence has come out well and in an understandable way. At the same time, the Vringo bettor needs to bear in mind that the trial is not at the point where Google gets to present the evidence it believes will sway the jury in its favor, and the trial is far from over. The main takeaway at this point is that Dr. Frieder appears to have risen to the occasion during his testimony, and he delivered the goods about as favorably as Vringo could have hoped. Vringo has made a prima facie case as to its claims, and Google's request for immediate judgment was refused today. This means the ball is now in Google's court and the onus is now upon Google's experts, Dr. Ungar and Dr. Ugone, to testify as well as Vringo's experts have.
Look for Google to conclude its side of the case as early as end of day Friday, but as late as early Tuesday. Leaving aside some time for short rebuttal presentations by Vringo, we can likely anticipate that the jury will begin deliberations by the middle of next week, with a very reasonable likelihood that a verdict will be returned by or before the end of next week.