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A Fairy Tale For The Amusement Of Vringo Vs Google Et Al Followers.

|Includes:FORM Holdings Corp. (FH), GOOG

I'm long Vringo (VRNG) common and warrants. More about that at the end of this rhetorical indulgence.

This isn't an accurate mirror of the Vringo vs. Google (NASDAQ:GOOG) et. al. case. It's just a slightly similar fairy tale with lots of embellishments which distort reality heavily - to an absurd level in some respects - for dramatic effect. Its intent is primarily to provide a bit of entertainment - a cynical indulgence break from reality for frustrated Vringo longs. But I also try to make a point: If you can create enough mayhem for long enough, everyone around you may lose sight of even the most obvious fundamentals. Obfuscation, delay tactics, and power brokering often work. That's a sad but genuine reality. This story, however, is just a fairy tale. But let's have some fun with it anyway:

For the purposes of this story I was born long ago, at a time before any notion of a vacuum cleaner like device existed. Everyone used brooms or similar old world implements to push debris from one place to another - they were the only tools available for the job. Nobody had ever thought to use a vacuum principle to devise a machine which could clean. But I was a young nerd of the time, even though nobody called us nerds then, and just naturally interested in all technologies of the day. I had the heart of an engineer and scientist, and was always eager to explore. And I wanted to use my skills to push technology and mankind's condition forward. I also wanted to earn money doing so of course.

And one day, while sipping on a drink through a straw fashioned from a reed from a nearby riverbank, and watching a sibling labor to clean the floor of our home with a broom, inspiration struck - "I think I just devised a better way!" I then quickly built my first crude but effective prototype "Vacuum Cleaner" - a machine which could remove debris far more efficiently and thoroughly than brooms or similar old tools. And it worked. In fact, it worked superbly!

Recognizing that my innovation was completely novel, and a very important new labor saving invention, I submitted patent claims for a "Vacuum Cleaner" all over the world. In my patent I described my innovation as "A device which creates a partial (or total) vacuum, that is, a reduction of ambient air pressure, and is structured to utilize the suction force of the vacuum to pull debris away from an area in order to clean the area. The debris can be captured in any kind of container, or can be routed via a duct away from the area, such as through a window or a door to the outside world." All the world's patent institutions recognized that it was an entirely novel and extremely useful idea, and clearly distinct from prior art such as brooms. So they all granted my patent.

I thus secured full legal rights to any fruits which would subsequently arise from production of vacuum cleaner type devices - whenever a person or firm built and sold such devices, I insisted that they respect my patent and pay me a reasonable royalty.

The vacuum cleaner proved to be a big hit - everyone wanted one because they were clearly more effective and efficient than crude old brooms. The innovation was a great success!

But, in spite of a promising start and the popularity of my innovation, the company I partnered with to mass produce my Vacuum Cleaners didn't compete against other manufacturers well, and made several devastating corporate management mistakes which weakened the company terribly, ultimately leading to their utter demise. Alas...

And even worse, certain powerful firms knowingly decided to simply overtly infringe upon my patent. Those firms, already quite rich from previous sales of hundreds of millions of brooms, become even more rich and powerful as enormous sums of money were made by sales of their extremely popular vacuum cleaners, which one characterized as "Super Brooms". I couldn't effectively compete with those already rich firms - the company I partnered with perished, so I found myself alone as an ordinary private citizen with minimal resources, whereas the rich firms had an enormous head start by virtue of huge bankrolls previously accumulated through years of global sales of brooms.

But even if I could have competed with them effectively, their willful infringement of my patent was immoral and illegal - they had no right to steal my innovation and profit from it without consent or compensation. I was incensed. So I vowed to file legal complaints to seek royalties from those who had overtly and unapologetically stolen my intellectual property. But of course it was impossible for me to personally pay for attorney and related expenses in a high profile legal battle with any super rich firm. So first I had to find a team which was interested in the battle and had the necessary skills and experience, and partner with them. And later we had to assemble a public corporation so money from investors could be acquired to support our quest. Those steps were quite difficult and time consuming. So by the time all our ducks were lined up, years had passed. But finally our team filed its first complaint - we hauled the largest infringing firm into court. And we won a very clear victory - the jury wholly agreed that my patent was egregiously infringed, and ordered just compensation. They evidently made a terrible miscalculation for the primary compensation figure, but at least their fundamental decision was correct and just.

But as the judge tried to work out the final details for his court's ruling, the attorneys for the infringing firm engaged in incessant mesmerizing legal maneuvering which stretched the process out for months and months. They labored tirelessly to introduce new details to consider, and to obfuscate every facet of the process until everyone was overwhelmed with distractions and almost blind from intentionally confusing serpentine like maneuvers. They frequently submitted new requests for additional information, new depositions, new conferences, and for process delays so that all their requests could be patiently considered in detail. And sometimes they misrepresented past conversations, thus creating confusion and delays as needs for further discourse were considered. Eventually it became clear that they simply sought to stretch the process out for as long as possible, while in the meantime their clients continued to embellish their fortunes by making and selling enormous numbers of vacuum cleaners (oh, pardon me, "Super Brooms").

Then they assaulted my patent by claiming that an ordinary legacy broom was clearly prior and public art, and that my patents were thus invalid. They explained that brush brooms function, in part, by creating a vacuum in the area behind the trailing edges of their bristles, and thus draw debris away from the area to be cleaned, and thus utilize, in part, the very same vacuum principle to clean. And this process was perfectly clear visually - everyone could easily see the phenomenon in action. A machine which replicates this action is in actual fact, at its technical core, just a mechanization of a visually obvious part of a broom's functionality. That is, it's just an alternate means to implement the same process - a process which is visually obvious, prior and public art, and thus not patentable. They explained that patent authorities are human beings after all, and thus aren't infallible. And sometimes the most obvious things are the ones which are overlooked. They graciously acknowledged that patent authorities do the best they can, but in this case they simply didn't notice the obvious prior art. They made an honest mistake. But it was clearly a mistake.

So they claimed that my patents should never have been granted in the first place, and they filed legal complaints to have them invalidated. They even implied that I was attempting an indirect heist of their long cultivated and purely honest broom business - they invoked innuendo to suggest that I was effectively trying to usurp patent ownership of a key principle of broom functionality, and by doing so intentionally subjugate their honest business out of sheer greed.

The patent offices, impressed by the high standing of the very rich firm which filed these complaints, took them very seriously, and initiated a long process of reviews and appeals.

The rich firm also claimed that they discovered a way to achieve the same cleaning process without infringing on my alleged and soon to be invalid patent - they announced successful development of a work-around, and thus they no longer infringed upon my alleged patent, and thus were under no obligation to pay future royalties irrespective of whether my patent was later deemed valid or not. Details of the work-around weren't announced to the world, but never mind, they promised it was honest and genuine. So they asked the judge to carefully consider this new development in patient deliberations as well, and they requested the scheduling of numerous depositions of experts in related fields, and submitted extensive arguments imploring the judge to dismiss all awards of future royalties as directed by the jury - after all, since they were no longer infringing, as a simple matter of justice they shouldn't be obliged to pay any future royalties.

That was a surprising development because it was very difficult to imagine how the vacuum cleaner patent, which was very clear and quite fundamental, could possibly be avoided by a firm which was manufacturing and selling vacuum cleaners (oh, pardon me, "Super Brooms"). But the work-around accomplishment remained clouded in mystery for a long time - the rich firm refused to release any details about their work-around, claiming a need for secrecy to prevent industrial espionage related theft of their new intellectual property. This was supported by the court, so observers were left in the dark as the matter was considered and debated at great length over an extended period behind closed doors.

Eventually, much later, we learned that the work around was based upon the concept of using two high pressure fans. The first, a head mounted fan, blasts air downward to dislodge debris from the floor under the cleaner's head, thrusting the debris up into the interior of the confined head assembly, thus suspending the debris in the air briefly. The second fan then transports the debris from the interior of the head assembly to a collecting container such as a bag or pan. The transport air is then vented to the outside of the machine. The firm explained that this second fan simply conveys debris, like a conveyer belt moves goods, from one place to another. Thus this new machine didn't infringe upon my vacuum cleaner patent, because it didn't involve a vacuum process at all, but rather used pressurized air to dislodge debris, then a conveyer fan to push the debris into a collection container. Upon finally releasing this information, many thought "Wow, they did it! They successfully worked around the vacuum cleaner patent by creating a cleaner which uses a pressure blast to dislodge debris and a conveyer fan to simply push the debris into a container. It's elegant and impressive - they're very clever and innovative!"

But eventually our team's attorneys pointed out that the 'conveyer fan' was actually a suction generating vacuum cleaner fan clothed in other words. That fan did not in fact push debris from the cleaning head to a collection container, but rather pulled debris from the cleaning head by force of suction. That pulling action was the result of negative pressure, that is, vacuum force, rather than positive pressure, that is, blowing force. But the rich firm, with stunned looks on their faces, said that was plainly ridiculous, and that our attorneys were obviously intentionally maligning their client's wonderful new invention by dishonestly twisting descriptions of how it works to make it sound like their original alleged vacuum cleaner invention, when in fact it was genuinely different. They said that the first fan creates internal pressure, and the second fan simply conveys that pressurized air from the cleaner's head to a debris container. They argued vigorously that their work-around was a unique new technical innovation which didn't infringe on my alleged patent in any way. And those forthright arguments seemed to make sense to many people.

But our team countered that the primary principle of operation of the work-around was in actual fact identical to the principal of operation in my original vacuum cleaner patent - the 'conveying fan' did not push debris from the cleaning head to a collection container, but rather pulled debris from the cleaning head to be subsequently deposited into a collection container. Suction, not pressure, was the key force involved.

But the rich firm's opposition was unrelenting - they stuck tenaciously to their talking points which emphasized the conveyer analogy, repeatedly characterizing the idea that a vacuum process was involved as utter and obvious nonsense - they argued vigorously that their innovation was pressure based technology, not vacuum based technology, and that our team was disingenuously spinning reality in an attempt to save a sinking ship. They reiterated that in actual fact their fan transported debris by conveyer action - it was never devised around the concept of suction, and no systemic suction process was involved - it's a purely pressure based system. They went on to say "Look, your machine simply mechanizes the action at the trailing edges of a broom's bristles, a prior public art which is not patentable. Our device simply mechanizes the action at the leading edges of a broom's bristles - it pushes debris into a container. It's entirely different. Accept reality - your original alleged patent should never have been granted in the first place, and will ultimately be ruled invalid. And our new mechanism is entirely different than yours anyway - you mechanized the action at the trailing edge of a broom, and we mechanized the action at the leading edge of a broom. And all your attempts to spin that reality into some tale of fantasy contrived to satiate your greed will ultimately be seen for what they are - lies." They were incessant, intense, and verbose in defense of their work-around.

Interminable exhausting debate about this matter ensued until almost nobody knew what to think, or, at times, much cared any more...

The judge was primarily an attorney, not a specialized scientist. He was quite intelligent, but the fundamental science and technology involved wasn't the primary focus of his life's work - he wasn't a research scientist first - he was an attorney first. Nor was it a life's focus for throngs of observers, most of whom defended one side or the other based primarily on personal experience with the related firms and their products, or how convincing their public statements seemed to be.

And many casual observers, though not really well equipped to judge the technical merits involved, passionately supported the rich firm because their products had proved highly beneficial in their personal lives (by virtue of my invention, but that detail was usually overlooked), and their public statements characterizing 'patent trolls' as simple greed motivated thieves who were a danger to honest hard working firms gained a lot of public traction. The rich firm vigorously cultivated the support of their fans - they well understood the powerful advantage of passionate sympathetic masses.

And the rich firm even lobbied the support of the monarchy, complaining that 'patent trolls' were a serious threat to industrial productivity and thus harming the economic health of their beloved country. They argued that 'patent trolls' were clearly destructive, wasteful, and immoral, and motivated by sheer personal greed. While assuring the monarchy that their own hearts were absolutely pure and righteous, they pleaded for new laws to banish destructive 'patent trolls' from the business world altogether. They embellished those pleas with monetary contributions of support for the monarchy. And the monarch, despite having precious little understanding of the scientific, ethical, or legal issues involved, nor any significant familiarity with our case in particular, immediately reacted by publicly stating "I don't like patent trolls". The monarch was first and foremost a power broker...

Eventually the judge presiding over the original infringement trial ruled that my team would be granted royalties for a brief period, but all future royalties would be held in a bond at least until the validity of the rich firm's work-around claims could be decided, trial appeals could be considered, and all other related matters were finally concluded. And even those brief royalties were to be held in a separate bond, because they might later be deemed subject to repossession if my patents were ruled invalid by the broom prior art, or any other claims of invalidity which might be tendered at a later time. In the meantime the rich firm continued to sell millions of vacuum cleaners (oh, pardon me, "Super Brooms"). And they continued to stir a passionate disdain for 'evil patent trolls' in the hearts of their supporters, citing the troll's greed motivated oppression of innovation as a serious danger to the health and vigor of the industrial world we all depend upon to enrich our lives. The wealthy firm wasn't a stranger to the art of power brokering either...

Much later, after an extended period of patient and disciplined scientific and legal analysis, all the world's patent offices ruled that brooms were not in fact prior art which made the vacuum cleaner concept obvious to anyone - they ruled that the vacuum cleaner invention was in fact a true innovation which fully deserved full patent protection. Then, after an additional extended period of even more patient and disciplined scientific and legal analysis, they eventually ruled that the rich firm's work-around invention was in fact simply a vacuum cleaner described by other words - it clearly could not function sans the critical suction effect, as demonstrated by the fact that it did not blow air out of the cleaner's head, but rather the machine as a whole pulled room air into the machine from around and under the head, then later expelled that air, and thus, despite the dislodging fan and the 'conveyer' analogy, overall it created a vacuum relative to ambient air and was utterly dependent upon suction force to transfer debris. And thus it was not in fact a successful work-around, but rather it clearly directly infringed upon my patent. Both rulings were strong, clear, and forthright.

And after the most respected patent institution's official press conference statements were completed, in response to a very belligerent reporter, the leader of their review board, losing his patience, finally said, "Look, a tricycle is not a jet airliner, and a broom is not a vacuum cleaner. And a Rube Goldberg design style vacuum cleaner is still a vacuum cleaner. After all the rhetorical nonsense is cleared away, those are the simple objective scientific facts. Our rulings are final. Conference adjourned."

But that was almost two years later. In the meantime the rich firm made billions of dollars manufacturing and selling vacuum cleaners (oh, pardon me, "Super Brooms"), whereas our team soldiered frugally along as best we could, surviving modestly on limited means. And most of our supporters ultimately became exhausted with the battle, and also had to turn their attention to management of more pressing issues in their personal lives. Some even died while waiting due to disease, accident, or old age. Our ranks thinned until only the most stalwart remained.

And then, lubricated by a wave of popular passion against 'evil patent trolls', a new law was enacted to very highly discourage minimally or non-practicing entities from ever filing any further complaints, so as to protect 'cherished national treasure class firms' from 'naked greed motivated assaults'. The new law finally protected beloved large firms from 'destructive evil patent trolls'. The monarchy looked us straight in the eyes and assured us that it was a just, necessary, and overdue legal reform.

And the new law left the possibility of individually determined retroactivity open for consideration in special cases...

Epilog:

Decades later, then leading a life of relative solitude which allowed focused study and exploration for the simple existential pleasure of the process, my inspired chemist sweetheart and I experienced a wonderful scientific and engineering epiphany which led to the development of an efficient process to create large diamond lattice structures. The process involved both deep chemistry and clever mechanics. We devised a cascade of catalytic chemical chain reactions which created an extremely short (even at molecular scales) but extremely hot ultra high pressure propagating wave front. When entrapped within nitride steel barriers, the edge of the wave front imparted enough intensely focused energy to force conversion of ordinary fine carbon powder into relatively thick pure mono-crystalline diamond films in a superbly efficient manner which could propagate indefinitely. And, using high speed multi-pass layering, the process could create mono-crystalline diamond structures on any scale. Thus straightforward and energy efficient industrial production of structural diamond components such as ultra strong corrosion proof diamond I-beams, or entire fabricated moldings such as ultra strong corrosion proof diamond vehicle frames, and innumerable other structures, was suddenly feasible.

But we decided to just keep the discovery to ourselves. We didn't reveal it to anyone - we vowed to take it to our graves.

My sweetheart, knowing the tortured history of my vacuum cleaner misadventure well, understood that I'd had enough of dishonest hearts, and disrespect and even overt hostility toward constructive personal innovation. By that time I realized that all a rich and determined adversary need do to steal the intellectual property of others is create mayhem and broker power until most people lose sight of even the most obvious fundamentals, effectively denying justice outright, or deferring it until it's too late to matter. Obfuscation mayhem, delay tactics, and dishonest power brokering often work. Property can be stolen. And power can be concentrated by manipulating followers and fans and brokering unsavory partnerships. And for many human beings ethical considerations are entirely beside the point - power is often cultivated amorally for its sheer sensual appeal. It's a sad reality. But it is reality.

So, since our species is evidently insufficiently mature to manage it honestly, humanity would just have to move on sans benefit of structural diamond technology. A shame, but humanity is what it is...

The end.

Disclaimers: I don't mean to suggest that this story reasonably mirrors the Vringo vs. Google et. al. case, in part because I don't understand several important details in the case well enough to represent them accurately, I don't personally know those involved, and I'm not close to events. Also, some substantial liberties, such as the timing of patent reviews and management of monetary awards, were intentionally distorted or misrepresented in order to emphasize the overall point of the story. Which is simply this: In my personal opinion justice in this case has been significantly subjugated for a considerable time by tenacious and incessant maneuvering by those whose clients are intensely determined to escape justice because they personally feel that they should be above justice. Fundamentally the actual case strikes me a simple matter of rather ordinary and transparent property theft, arrogance, and the corrupting influence of power. It's just difficult to see these fundamental truths at times because of all the mayhem created by overt obfuscation tactics, the degradation of human focus which naturally occurs after interminable confusing delays, and the background power brokering.

Mayhem tactics, immoral though perhaps not strictly illegal, are often effective. And, especially when combined with dishonest power brokering, they can sometimes ultimately thwart justice. That's too bad... And humanity pays a very dear price when innovative hearts are crushed by injustice. Mata, zannen...

However, these cases don't always fall prey to such tactics, particularly when occasional errors which too clearly reveal the true hearts of mayhem practitioners and power brokers occur. In my novice estimation there's a reasonable chance that genuine justice will prevail in the Vringo vs. Google et. al. case, and that's why I remain long. However, I also recognize that there are no guarantees. So though I remain long, and never forget the critical importance of patience, I also worry...

Again, this was just a fairy tale constructed as a vehicle to express a personal perspective, and nothing more. It's not intended to mirror actual events with fidelity, so please don't interpret it as such. Also bear in mind that I'm an engineer, not an attorney, and I have precious little interest in legal mechanics (even though I find the overall high drama interesting). Thus I can't be relied upon for credible legal perspectives - I'm simply not equipped to provide them.

However, with my apologies for slandering perfectly innocent rodents, a rat is a rat. And I feel confident that I know a rat when I see one...

I use Blekko.com for search. Patience, mutual respect, and civility please.

Position disclosure: I'm long, and only long, Vringo common and warrants. I plan to retain my long Vringo holding until at least Judge Jackson rules. However, due to recent political events (see my 4 August 2013 comment at SeekingAlpha.com/article/1571732-uspto-c...), I make no absolute promises.

Disclosure: I am long VRNG.

Stocks: FH, GOOG