Icarus Falling

Icarus Falling
Contributor since: 2012
Dan,
Do you accord no weight to Vringo's argument that "it is apparent that the jury made a simple decimal point transposition error in arriving at its damages amounts."
It seems to me that this is the more logical argument as it relates to the running royalty than the numbers the jury awarded as those numbers do not make sense when you look at the amount awarded against Google as compared to the other defendants.
The better of the argument seems to be that the Google number was the mistake that warrants an upward revision as opposed to Google's argument which is that its number should be revised down based on the other defendants' numbers.
Thanks,
It works both ways. Google says that based on the damages awarded against it, it proves that the Royalty Base is 2.8% instead of 20.9%, and therefore any running royalty should be based on this. Google also argues that based on this, the award to the other defendants makes no sense and should be adjusted downward.
The opposite is also true. The award as against the other defendants corresponds more to the 20.9% number that Vringo put forth at trial than the 2.8% number that Google says the jury used to calculate its damages.
Vringo will certainly argue that it is the Google damages number that is the outlier and they will have the better of that argument based on the evidence at trial.
I understand your frustration that public reports have constantly published incorrect information regarding whether a future royalty has been awarded, but I think your analysis as it relates to the facts is short sighted. As you have not even seen Vringo's responses to the most recent motion or the other post-trial motions, I think any analysis is premature.
I wholeheartedly disagree that Google has the upper hand. I believe based on the facts and the law that any damages adjustment as it applies to the running royalty will only benefit Vringo and that they will realize the hundreds of millions of dollars that people have been talking about. Just because they have not been awarded it yet, as falsely reported does not mean it is not coming.
You offer no analysis of why the two ZTE lawsuits will not succeed. You do know there is one in Great Britian that was filed well before the recently filed Germany action. You simply state that Nokia would not have sold the patents if they were valuable.
Do you even know that Nokia gets 35% of what Vringo recovers based on these patents? That it would have been much harder for Nokia to enforce and extract the full value from these patents than Vringo and therefore Nokia took $22 million upfront and they expect much more on the back end. Have you research to find analysis of what these patents are worth? The answer is no.
You fail to examine the reason for the equity offering. Was the company suppose to limp along with minimal cash on hand as it completed its battle with Google and began initiation of litigation against ZTE? Companies raise money. The dilution was not bad considering the hundreds of millions at stake.
Do you know anything about Vringo's management and their experience in patent litigation and the Nokia patents? Of course you do not.
Did you see in Vringo's recent earnings release that they purchased additional patents relating to internet advertising bidding? You see those advertisements at the left and right of your screen? How do you think they wind up there?
The Modernist. Really? I think you would be better served finding more reputable sources. The Google settlement is worth more than the Modernist states.
Also, Vring is putting money into research. Read the earnings call transcript. They are doing it very efficiently. Would you rather they waste money in doing it?
Are you really comparing Google and Vringo when you state that Google has not diluted shareholders? While Vringo is undervalued and is entitled to a large amount of money from Google, the companies are not comparable. Try looking at other "patent troll" companies for a comparison.
It is okay to no like what Vringo does, but you have let that infect your analysis. Now, I may be wrong, and Vringo may fail, but everything I have seen to date and everything I know, leads to the conclusion that the company is currently fairly valued at between $10-$15 and you can easily make a case for $20 with a very reasonable multiple depending on how the Google money comes in.
Look at James Altucher's worst case scenario for Vringo and I think you will see, the downside is really non-existent at this time.
Feel free to short. You may make money. The market is irrational at times and as long as the final terms of the Google judgment remain unresolved, misinformation and speculation can still cause wild irrational swings in the stock price. Ultimately though, the only direction that makes any sense for this stock is up and that move should be large.
You have the FDA decision on the resumption of the clinical trial which could happen in Q1. I am watching this stock closely and at this time depending on where my money is allocated at the time, plan to start a position in Q1 leading up to the early Q2 decision from the Supreme Court. I of course could be wrong, but I expect PIP to have the verdict sustain, i.e. successfully defend against SIGA's appeal.
I hope I am wrong, but I continue to get the feeling that Google is taking this to trial.
James:
Thank you for the update. While I agree that it makes all the sense in the world for Google (Apple, Microsoft etc.) to buyout Vringo, I continue to believe that a settlement is much more likely at this point simply based on the status of the litigation. They are on the courthouse steps with a mediation scheduled in front of the magistrate judge for tomorrow for about 4 hours until they have the final pre-trial conference in front of the district court judge.
Google can always settle due to the short term time crunch and attempt to buyout Vringo later.
Of course it is a gamble. It is not a verdict. PIP won a verdict at trial. It is upholding the verdict on appeal. Yes it is very tough to value, but I think a double is safe to assume.
They can only do it that way by denying Google's motion. I am not going another round with you. It was not possible for the court to do so and grant Google's motion. It is very easy for the court to place all the papers on two tables, see that the stack of papers comes up to their heads, look at the stack of papers and say "there must be an issue of fact in there somewhere, summary judgment denied."
The Court looked at the stack of papers and simply said there are issues of fact. It would never have issued a summary judgment in Google's favor given the timing.
http://seekingalpha.co...
So I was right for all of the reasons stated above.
Summary Judgment Denied as I said it would be by a summary 1 page order. Thanks.
Summary Judgment Denied as I said it would be by a summary 1 page order.
Whenever you want to apologize, you can post something on one of my articles.
Summary Judgment Denied!
I think it may drift lower or stay in this range without any catalysts or new until next year. We do not know when they will receive a decision from the FDA or the Delaware Supreme Court. Both events are expected Q1 of next year. If you have spare money not a bad idea to build a base. If either the Court or FDA news is positive, you coudl see a 50% gain.
I was not impressed. They seemed to reaching by saying there are no disputed issued of fact and taking tortured positions relating to the common understanding of plain english words.
I would be surprised if it were granted. I would also be surprised if Google even moves for a stay this close to trial. They would not get it and the Court would probably not look to kindly on the motion. At best they may raise it during a conference to gauge the temperature of the Court.
Nice article. Thanks.
Yes, but sometimes in-house counsel and corporate strategy go through cycles. First they hire a ton of in-house lawyers because they are tired of paying so much for outside counsel. Then after a few years the corporate suits notice that the bottom line of the legal department looks a little bloated and they fire most of the in-house counsel and start referring cases out again. Same thing for strategy. I know some companies would rather over pay for legal services for cases such as employment discrimination than to pay the plaintiff, because they want to send a message that they will not pay for frivolous claims. It is just something to consider as the trial approaches.
Maybe Google is spoiling for a fight. That is the wildcard. Some businesses see litigation as sport and want to send a message they will not be messed with.
Never invest more than you can afford to lose otherwise it is gambling and not investing. It is somewhat gambling as is when you are talking about a stock like this or a biotech when you know that the stock price will rise or fall dramatically based on a binary event. But if that is your investing style, you do your best to place the odds in your favor by doing research and due diligence.
I have spent hundreds of hours reading the litigation documents and Vringo's SEC filings. I believe there is a good chance they will win or settle. However, I do not know what Google's in-house counsel or board of directors is thinking or willing to do and I do know what 12 yet to be picked jurors will do and that is the wildcard.
Once trial is over any appeals do not involve much in terms of cost. Attorneys time is limited to writing the appeal brief and the cost of filing is limited. So Vringo will definitely have enough cash to get through an appeal. The only problem could be that an appeal would probably not be briefed until the spring and decided until next fall, and at that point the USPTO decision could come back into play. However, if Vringo has already won at trial and it is Google that is appealing, I think it is safe to assume that the victory would have propelled the stock price much higher in the interim and offered every current investor and opportunity to exit with some profit.
It is a risk, no doubt. Never said otherwise. It is a calculated risk. I think the risk reward is worth it, but any dollars you invest in Vringo, you have to be willing to lose.
Steve is correct. A trial outcome is a trial outcome. A later change in circumstances does not wash away the outcome. They still infringed while the patent was presumptively valid. Laws change all the time. We do not reopen every case that has already been litigated.
All attorneys that I know, use "I" instead of "i". Nice try.
Am I not allowed to conflict with the great James Altucher? Just kidding, but in all seriousness, it really could go either way. Google certainly has the resources to litigate. Some companies make short term irrational decisions relating to litigation to send a corporate message that they are not going to settle. Google can easily cut a $1 billion check. Maybe Google is willing to risk cutting a $1 billion check to send a message to every other patent troll out there that if they want to sue Google, they had better be prepared for a scorched earth litigation battle that will take years in court. Normally a case like this would be tied up in court for 4 years. The rocket docket has really helped Vringo.
I think I said $7-$10 somewhere else, so I will stick with that for now. Of course that assume settlement or trial victory. I think the $30 predictions are getting a little ahead of themselves, although I would love them to be correct. It was also nice to see them starting to put the Nokia patents to work. If they can announce additional pre-suit activities relating to the Nokia patents and perhaps even file a case or two in the near future, that should help the share price.
Scott,
The market can remain irrational longer than some investors can remain solvent. It is frustrating to watch a stock fall that you believe should rise, particularly if you have no money left to average down if you really believe in the stock.
Vringo is heading for a binary outcome. I win or a loss at trial. By November 1 there will be a decision. Where the stock goes between now and then is pretty much irrelevant. If they win the stock will be much higher than today's closing price. If they lose, the stock will be much lower.
I never want to go to trial, but some demented lawyers do. I think Quinn Emanuel lawyers are those lawyers. I also think that while the PTO ruling does not mean anything as Vringo has yet to even respond and an ultimate decision in years away, Google will be emboldened by this ruling and now not want to settle. They think they have a real shot at getting key claims 10 and 25 declared invalid by the PTO, so they will want to litigate until the cows come home on this issue preserving all their rights.
Since June.
It will be hard to dumb down, but I would think perhaps Lang as the founder of Lycos might be able to do it.
I invented a search engine that competed with Google. Google stole my patented search and has proceeded to make billions using it. They were just better at marketing than I was at Lycos. Others will testify as to the nuances of how Google is infringing on my patents, but I can tell you that they stole me idea, I got paid nothing and they now have billions.
Something like that.
As each day passes, I am starting to believe more and more that Google may actually go to trial. Perhaps that is what they want Vringo to think as well.
But yes, that filing with the PTO was expected. I actually thought that it had already happened as I believe it was referenced in one of the motions in limine. I cannot remember which one there are too many at this point.
It is meaningless. As Vringo stated in its press release, it will take years for the PTO to reexamine. The trial is in two weeks.
Thanks.
Was probably going to write about that today or tomorrow if I can find time. Those are the interesting motions. They will most likely fall by the wayside, but obviously the Court needs to look at them before trial, which is all the more reason that after quickly reading the summary judgment papers and realizing there are issues of fact, the court will not look at them further and not issue a decision.