Adam Gill

Adam Gill
Contributor since: 2013
Excellent analysis. Looking forward to the next article.
Ok, so you were all surprised. I guess someone's gotta be on the other side of the trade.
It was a poor argument by GOOG and a rehashing of things they already lost. Of course they lost, again, only a few months later. Sure they had an argument, but having an argument and winning it are 2 very different things. This was an easy call.
This should have been a surprise to no one. 3.5% was decided by jury. JJ confirmed 20.9 was royalty base in August.
Netprf - this is just a discovery battle, a sideshow. It does not move the needle of the case in terms of liability, just potentially the timing, and not by much if at all at this point. Next real issue (although a small one) is the judge's decision on supplemental damages, which should come soon. The big issue of course is whether the workaround allows GOOG to escape infringement.
I was being serious and offering you advice, and good advice at that. Take it or leave it, it's your money.
So here is how it usually goes. GOOG without question produced some documents and perhaps (but perhaps not) even some source code. The production may or may not be voluminous, and most likely was given to VRNG on the last possible day. It will take a little while for VRNG to review it, then ask GOOG to supplement and GOOG will say ok or no. If they say no, VRNG can file a motion to compel. I would expect a motion in 1-2 weeks if there is going to be one. That is fairly fast for this sort of thing, especially if the production was large or dense, but expert reports are due in a month so they have to get cracking.
Patent Plays and jjcrunch - If you are going to invest in patent cases, you will benefit greatly by learning the difference between production and filing.
This is wrong.
The Court ordered that documents be "produced" by August 25. Document productions are NOT filed, and would not show up on PACER. Neither will the expert reports, by the way.
And, the next deadline in the VRNG docket is today, when GOOG will be filing its response to VRNG's calculation of supplemental damages.
That is part of the question in the long term. In the short term, the question is, what is the effect of 15x dilution? Answer seems obvious to me, but apparently not to some.
SoCalNative - perhaps you would not have tired of it if you made a few thousand bucks every time it went up and down. . .
Kevin, it is not as simple as that. First, read the disclaimer on the Google Patent page - that's the little question mark next to "priority date"
There is analysis that goes into it. A continuation-in-part does not necessarily get the benefit of the earliest date in the chain. Specifically, claims containing new matter (which is why it is a CIP) do not get priority.
Interesting article, thanks. 2 thoughts:
1. These are CIPs of CIPs, so you can't assume that they get the 1999 priority date. If not, the 2006 priority dates that they will get are not impressive. Even if they do go back to 1999, validity may be an issue here. Have you looked at or thought about validity?
2. In your claim chart, you state that the preamble is not usually a limitation. While that is generally true, the preamble for the claim that you charted contains the antecedent basis for "vacancy" in the claim limitations, so it will likely be read as a limitation. It also could also be said to define the subject matter of the claimed vacancy, which makes it even more likely to be construed as a limitation.
That was 500 thousand, not million.
How is it even possible to trade 3X the float in a single day? Crazy.
As I wrote previously, I like their prosepcts long term, so I'm no basher. But with 15x dilution coming, a $10 market share gives them an approximately $150M market cap when the North-South deal closes.
It is shooting up now because the float and volume are ridiculously low - i.e., it is extremely illiquid. That is about to reverse.
With no visibility to the Rockstar assets and the plan of attack for the north-south patents not yet revealed, getting in now is gambling. I like to define my edge in my trades--which is impossible here--and for that reason, I'm out (for now).
Super: Dilution is not a Rockstar issue. It is a North-South Holdings merger issue. Dilution will multiply outstanding shares by 15X, mostly in the form of 1.4 million "Class D" shares that can convert to common stock at a 10 for 1 ratio.
Rick: Here is a link to an SEC filing detailing the Class D stock.
http://1.usa.gov/13qQ9SW
I am not sure what you mean by "precedent setting case," but it absolutely IS a "precedential opinion:"
http://1.usa.gov/14JtuEd
If you mean that it did not substantively add to the law in this area, you are entitled to your opinion, although other readers should know that it is contrary to the considerable discussion of the decision so far by actual patent lawyers.
Fly-
You are wrong. The decision absolutely shifted the application of the rule.
If this latest Baxter decision stands, and the USPTO rejects the claims of the VRNG patents, then all appeals of all issues in the GOOG must be completed before the appeal of the reexamination is completed. That was not true before the latest Baxter decision. Before, only a "final judgment" on the validity was arguably needed to be res judicata on the PTO/validity issue. Appeals on other issues (like royalties) could have been pending and the verdict would have been safe.
However, a lot still has to happen for the reexaminations to kill the GOOG verdict. BPAI appeal followed by Fed. Circuit appeal (if necessary) on '420, plus entire reexamination process followed by BPAI followed by Fed. Cir. appeal (if needed) for the '664. All asserted claims must be lost. And it all has to happen before the GOOG case is final - which is the goalpost just moved out by the Fed. Cir.
I'm still long VRNG.
It means that there is a decent likelihood that the Federal Circuit may re-hear this issue en banc, in which case there may be a different outcome.
If you look at the concurrences and Judge Newmann's dissent in the October 2012 denial of Fresenius' en banc request re PTO invalidiy determination, you will see that several members of the Federal Circuit believe that a final judgment in a court proceeding is still res judicata. The 3 concurring justices concurred in the denial of the en banc because they trusted that the res judicata principles would remain undisturbed. And then there's Newmann, who is even more outspoken on this issue.

To the extent that this principle has changed with yesterday's Fresenius decision, this is probably a decent en banc candidate with significant support for res judicata.
Deal closed, announced 6/27.
http://yhoo.it/15LeOSK
PP: wrong. See OTIV hearing (5/9/13) vs. decision (today). Your article confuses correlation in a few select cases with causation.
I think it means a sudden reversal, and so do several dictionaries: (http://bit.ly/17Uro8w; http://bit.ly/17Urr3X; http://bit.ly/17Urr42 ).
What do you think it means?
I arrived at the same conclusion, based on Fed. Cir. precedent and the Active Video case, although I think there is a chance that the judge may split the baby a little on the royalty base. Granted, GOOG's all or nothing approach there makes it easy to reject outright.
I also think that there is a decent chance that the judge sets the rate for the November '12 to May '13 infringement and either orders expert discovery on the alleged workaround or invites a round of briefing on it.
Saying that Google has flip-flopped "yet again" on royalties, however, is wrong. They never flip flopped in the first place, which is obvious from, among other things, the JMOL briefings earlier this year. You know that, or at least you should, and you shouldn't keep repeating that.
This space is, and has been, a high risk, high reward, binary outcome scenario in a relatively slowly moving system. If you cannot accept that, then this space is not right for you and your money.
The Order is the event, not the Hearing. There are usually months in between.
Correction- those were July puts. June ones are at about .24. Choose your poison. . .
VRNG is building a business. They need more quality portfolios. Patents to them are as good as cash, adjusting for risk and NPV. The same is not true for the market. That's one of the dynamics that creates such great opportunities and volatility in this space.
Chris, if you want exposure and to get in sub-2.65, sell the $3 June puts @ $.39
In other words, GOOG is using the COD defense - Confuse, Obfuscate and Delay. Welcome to litigation.
I saw that too.
Markman Advisors, if you are writing articles on this case and purporting to be a patent expert, you can't get central and critical issues in the case 100% wrong, like saying that the jury decided a royalty base of 20.9%.