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I am an active husband, father, lawyer (more than 24 years, how time flies), and investor. I believe in contrarian investing, i.e., going where the crowd isn't. I believe that successful investing, like successful living, requires equal parts listening and evaluating, followed by independent... More
  • Vringo Vs. Google: Take A Deep Breath, The Roller Coaster Continues 195 comments
    Oct 31, 2012 4:15 PM | about stocks: VRNG

    Vringo's roller coaster ride continues this morning. I am hearing from several sources that this morning, Judge Jackson ruled that Vringo's PAST damages will be limited to damages incurred since the Complaint was filed. This would mean that the Vringo would be able to collect damages from September 15, 2011 and going forward. I haven't gotten 100% confirmation of this, but I believe this to be accurate, and it would certainly explain the big dip in share price today.

    A few takeaways:

    1. If true, it will obviously mean a significant cut in the past damage claim, since past royalties will only be collectable from September 15, 2011 forward.

    2. Dr. Becker's damages for this period should be easily calculable, as I understand his damage breakdown is quarter by quarter.

    3. Vringo's claim for future royalties is still intact.

    Again, I believe this to be true. All told, if we presume to that past royalties are about $500M (which is the approximate range that has been discussed), then we would be looking at a total potential award of $600 to $700 million, not including prejudgment interest and attorney's fees.

    Expect more volatility today. Obviously, I am not wild about what this does for my November $5 calls, but I am still encouraged for my common and warrants.

    Disclosure: I am long VRNG.

    Themes: GOOG Stocks: VRNG
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Comments (195)
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  • Wow...not good news.
    31 Oct 2012, 02:11 PM Reply Like
  • Holy Crap, SteveKimLaw. If true, this is a total odd-lot.
    31 Oct 2012, 02:20 PM Reply Like
  • So Steve. Even if they only get awarded $600 million. Do you think the pps can still at least reach $8?
    31 Oct 2012, 02:21 PM Reply Like
  • Drone,


    The market cap is less than 100M. If they can shake 200-600M out of GOOG expect the market cap to raise by 100-500%. Also this case will set precedent for future litigation. However if they are only awarded 100M or less I'd expect a tumble. You risking maybe 2 dollars of downside for up to 6 dollars of upside. Not a bad bet but surely not a risk free one. A good spec. play this is - but no more than that. At $5 this there wasn't much froth left but if you got some near $2 I think you'll be ok.
    31 Oct 2012, 04:13 PM Reply Like
  • You are incorrect on your market cap. It's pushing $300mm at 2.58 (110mm shares).
    31 Oct 2012, 04:37 PM Reply Like
  • Shhh =)
    31 Oct 2012, 07:33 PM Reply Like
  • everyone happy about a possible 500M settlement 2 weeks ago


    600-700M win would be huge
    1 Nov 2012, 08:58 AM Reply Like
  • Steve...There have been so much back n forth regarding said "latches" I have heard from emails the "latches" only apply to willfull infringement. The YMB and others profess to know the law and wondering if you can support or deny this claim as it applies to willful infridgement only. Thanks!
    31 Oct 2012, 02:24 PM Reply Like
  • $600 Million divided by 110 mil shs = $5.45.......OK, but not as high as some predicted.....hmmmm...... seems the better place to be...
    31 Oct 2012, 02:24 PM Reply Like
  • yes but it also gives a lot of credibility to all other situations
    and deserves a 2-3x multiplier


    so easily $10-15
    1 Nov 2012, 09:00 AM Reply Like
  • SteveKim
    By latches is Google admitting fault? and two going into verdict with Jury is this a better change of a Buy out now a reasonable revuene stream for VRNG can be determined and buy out price be determined? (say the $6-$9) rather than the 20, 30, 40, 50+ we've heard before?
    31 Oct 2012, 02:28 PM Reply Like
  • no, laches does not say anything about Google admitting fault
    31 Oct 2012, 02:42 PM Reply Like
  • and The judge after asking the 2 companies to reach a settlement now tells us this ?


    this is absurd at best
    31 Oct 2012, 03:01 PM Reply Like
  • ..oh Danny Boy..the pipes, the pipes, are calling..


    31 Oct 2012, 03:08 PM Reply Like
  • This is totally absurd.
    31 Oct 2012, 03:12 PM Reply Like
  • I don't think it's absurd at all. We all knew the risks...


    31 Oct 2012, 03:15 PM Reply Like
  • Still money to be made here added to my position with @1.75 filled order.. so hold til the END..
    31 Oct 2012, 03:14 PM Reply Like
  • Why is it halted again???
    31 Oct 2012, 03:17 PM Reply Like
  • no idea....?? yet..probly verdict?
    31 Oct 2012, 03:20 PM Reply Like
  • Vringo Shares Halted Pending News...
    31 Oct 2012, 03:21 PM Reply Like
  • buyout...
    31 Oct 2012, 03:22 PM Reply Like
  • That's what I'm thinking/hoping...
    31 Oct 2012, 03:23 PM Reply Like
  • GOOD LUCK TO ALL LONGS... Let's make some money and wrap this RIDE up...
    31 Oct 2012, 03:24 PM Reply Like
  • how can a judge come out with this when the trial is almost at 100% and after asking the 2 companies to reach a settlement?
    31 Oct 2012, 03:24 PM Reply Like
  • anybody have a recommendation for a news feed? I couldn't get any up to the date news during the halt
    31 Oct 2012, 03:25 PM Reply Like
  • Either, we (longs) screwed up big time on vrng or there might be some good story out there. At this point, everybody is making their own assumptions. Any idea when it will start trading again????
    31 Oct 2012, 03:28 PM Reply Like
  • dear god i hope i can afford a new heart after this.... i guess it wont matter the wife will.


    all in humor of coarse just riding on the roller coaster weeeeee.
    31 Oct 2012, 03:29 PM Reply Like
  • ok so there isnt anything bad to be halted for...???
    31 Oct 2012, 03:29 PM Reply Like
  • How much worse can it get? I think they are about to announce a settlement or BO. Probably a settlement, and probably for much less than we all hoped...
    31 Oct 2012, 03:33 PM Reply Like
  • Folks, nobody should be blaming anybody here while losing money on vrng. Recall, Steve, from the beginning, stated that is like a gamble and everybody should think twice before jumping into vrng. I took my own risk.
    31 Oct 2012, 03:30 PM Reply Like
  • The news is either benign, irrelevant, or positive..90%...yes..?
    31 Oct 2012, 03:31 PM Reply Like
  • Or bad. Like a settlement for less than $300 million bad...
    31 Oct 2012, 03:35 PM Reply Like
  • The news so far has been -ve though, with limited settlement.. so the crazy projections going on are all done and dusted, maybe like a $6 to $8 settlement at best ?
    31 Oct 2012, 03:37 PM Reply Like
  • They wouldn't halt the stock for something that is irrelevant or benign
    31 Oct 2012, 03:37 PM Reply Like
  • That's the train I'm on.
    31 Oct 2012, 03:41 PM Reply Like
  • Droney...Im with ya..but its happened before..for news we already
    31 Oct 2012, 03:42 PM Reply Like
  • I'm glad someone said this.
    31 Oct 2012, 05:26 PM Reply Like
  • Previous halts were Code M Individual Security Volatility Trading Pause


    Last halt is a Code T1 News Pending
    31 Oct 2012, 03:33 PM Reply Like
  • Thank you again Steve for all the coverage you're giving us


    To be sure: (assuming a win) the expected compensation would be $600M+prejudgment interest and attorney fees?


    Do you believe VRNG's case is as intact as it was before Sandy? or does this change from Jdg Jackson harm jury opinion?
    31 Oct 2012, 03:36 PM Reply Like
  • Steve, how can the judge suddenly do this? weren't the figures/time periods disputed before? why would he just now decide to change this?
    31 Oct 2012, 03:39 PM Reply Like
  • I agree, this is absurd at best
    31 Oct 2012, 03:44 PM Reply Like
  • Author’s reply » Here is my assumption, again I have not seen transcripts. Now that the evidence has come out, if the Court feels that there was not sufficient evidence to dispute the laches issue, he could take the damages falling within laches out of the jury's hands. It sounds like that's what he did, so the timing would be appropriate, i.e., the Judge made the decision after seeing what evidence came out at trial.
    31 Oct 2012, 03:58 PM Reply Like
  • Interesting point. I get the part that past damages are determine by the jury, but future royalties are determined by the judge. But can the judge really take the infringement verdict out of the jury's hands right before jury deliberations?
    31 Oct 2012, 04:33 PM Reply Like
  • Maybe he knew a settlement/buyout is happening and he wanted this on the record to discourage future patent cases?
    31 Oct 2012, 05:26 PM Reply Like
  • Justice could be just a lie - if you're still confused - go to Google and search.....SCREWED AGAIN.


    tee hee
    31 Oct 2012, 03:40 PM Reply Like
  • it figured that the $$ are on the table from the judges ruling...AAPL..MSFT..who knows..someone has made an bet they did..!!~!!
    31 Oct 2012, 03:41 PM Reply Like
  • maybe the judge felt that the jury was leaning too much in favor of VRNG and wanted to avoid an excessive verdict. the fact that he had to speak out to me shows that he sensed the case had been in favor of VRNG, otherwise why bother to fix a date for damages?
    just my amateur thoughts
    31 Oct 2012, 03:44 PM Reply Like
  • This puppy is halted till tomorrow ..I can smell it..!!!!!
    31 Oct 2012, 03:45 PM Reply Like
  • When is the news release expected?
    31 Oct 2012, 03:46 PM Reply Like
  • Steve
    Is it true the brokerage houses are giving out Dramamine coupons with each VRNG transaction?
    Win or loose it was a lot of fun. Thx for the updates.
    31 Oct 2012, 03:46 PM Reply Like
  • Author’s reply » That's pretty funny, I'm glad you can keep perspective. I am as interested as anybody else to see what the T1 halt is about. I also feel like the stock is continuing to have polar reactions to news in this case. Remember when the stock jumped up over $5 on news that the MSJ was denied. I am not sure there was a rational reason for that, except that folks watching this stock are extra-jumpy. I for one would rather have been one of the folks buying at $2 today than selling at that price.
    31 Oct 2012, 04:01 PM Reply Like
  • Interesting point. I get the part that past damages are determine by the jury, but future royalties are determined by the judge? But can the judge really take the infringement verdict out of the jury's hands right before jury deliberations?


    BTW - is this one spooky Halloween or what!
    31 Oct 2012, 04:30 PM Reply Like
  • I would have to say that the real wild ride has just begun for that the Max possible $$'s are on the table for the GOOG trial. Those whom we have all speculated would jump out and possibly make offers are doing just that. This coaster has just passed the top of the first hill....the other part was the que line.. :O)
    31 Oct 2012, 03:49 PM Reply Like
  • Ill bet the halt has nothing to do with the trial..right..!!!!
    31 Oct 2012, 03:51 PM Reply Like
  • Halt code is T1 = pending news
    31 Oct 2012, 03:52 PM Reply Like
  • It's a regulatory halt - circuit-breaker...
    31 Oct 2012, 03:53 PM Reply Like
  • absolutely not


    previous halts were Code M circuit-breaker
    14:39:25 14:44:52 14:50:40


    Last halt is a T1 news pending


    Warrants are halted too with T1
    31 Oct 2012, 03:55 PM Reply Like
  • Due to the sell-off of the unexpected news/rumors regarding the judicial limit on past damages.
    31 Oct 2012, 03:56 PM Reply Like
  • The early halt was regulatory - the latter was news pending
    31 Oct 2012, 04:11 PM Reply Like
  • M is circuit breaker HALT T1 is PENDING NEWS..
    31 Oct 2012, 04:11 PM Reply Like
  • Steve


    you wrote
    September 15, 2011
    and after few lines
    September 15, 2012
    31 Oct 2012, 04:10 PM Reply Like
  • Author’s reply » Whoops, nice catch. Should read 2011 in both places. Thanks, I have made the correction!
    31 Oct 2012, 04:15 PM Reply Like
  • my pleasure
    31 Oct 2012, 04:16 PM Reply Like
  • I smell Buyout.
    31 Oct 2012, 04:19 PM Reply Like
  • I see a payoff-to-go-away. The past royalties was a big number. How does it affect future royalties. And what of the delay to file the lawsuit - does that impact the "wrong created".


    This is a big case, will provide precedents for Eons. I think alot of lawyers are pondering their futures.


    31 Oct 2012, 04:25 PM Reply Like
  • Good point. Future royalties is interesting as things transition to mobile. Does this patent and royalty stream play into Google's focus on monetizing mobile? If so, I would think future royalties could be significant.


    Great dialog on this either way!
    31 Oct 2012, 05:33 PM Reply Like
  • Okay, but what are your thoughts on the ruling of the judge?


    Is it a ruling based on solid precedent, or is it one of those "due process" types that proceed from what a judge thinks is fair?


    Statute of limitations for a state charging an innocent person is one thing. However, civil law?


    Is one to file claims and spend large sums of money on lawyers and tie up courts when the monetary damages do not cover the cost all just to cover a "well this could be bigger in the future" scenario?


    At what point are past damages no longer "material"?


    Also, can VRNG file new charges of willful IF they can show GOOG knew of the possible infringement before their "we didnt know about this before Sept" claim?


    I'm not overly surprised by this current turn, nor should anyone else; judges long ago became pseudo kings ruling whatever they want and ignoring the law. ACA is but the most recent example....


    Still Steve, what are your thoughts on the merits/material aspects of the judges ruling to limit damage time frame?


    31 Oct 2012, 04:42 PM Reply Like
  • I guess the willful aspect is surely much much stronger if we are talking about Sept 2011 vs Sept 2006 as starting date
    31 Oct 2012, 04:49 PM Reply Like
  • You mean Sept. 15, 2011 don't you?
    31 Oct 2012, 04:47 PM Reply Like
  • Not great news, but definitely NOT bad. Google is essentially admitting that they infringed on the patent but are trying to limit damages. Still a very speculative time, should be an interesting 2 hours or so until the market closes. VRNG @ 3.20 as I finish post.
    31 Oct 2012, 04:47 PM Reply Like
  • so if judge favors goog with this motion, what are your thoughts on motion to dismiss and the likelihood? tks
    31 Oct 2012, 04:47 PM Reply Like
  • So where does that leave us guys, the bottom has fallen out and the buyin price is pretty darn low, opportunity or sinking ship?
    31 Oct 2012, 04:54 PM Reply Like
  • even if bad ruling confirmed (which is absurd imo, especially with trial almost 100% done), potential award is 600-700M (90% of it due to future claims), which is still pretty big
    31 Oct 2012, 04:57 PM Reply Like
  • KevinPorter: I wish I had your confidence. I would never have sided with any person suggesting today's judgement was a possibility. Plus, future royalties lies with the judge, not the jury, which I am now re-considering based on his actions today.
    31 Oct 2012, 05:10 PM Reply Like
  • I see it as the judge basically said you did not own the patents back then, why should you get payment for them now. However, I think the judge will award VRNG royalty payments due to the fact that they own the patent now.
    31 Oct 2012, 08:01 PM Reply Like
  • They would have to prove that they have been considerably damaged by a delay in filing. Since patent is good thru 2016, they would have had to pay future royalties, had VRNG filed say, 4 yrs earlier. If there is a multiplier involved, they would have been on the hook for MORE not less had a case been brought yrs ago.
    31 Oct 2012, 05:08 PM Reply Like
  • Won't ZTE et al be able to use the lashes equity defense as well?
    VRNG to the jury: "we are owed at $500,000 at minimum".
    31 Oct 2012, 05:09 PM Reply Like
  • Steve, on what basis do you figure past royalties of $500M? Also, if you could clarify whether VRNG have claimed willful infringement, I would appreciate it.


    As an aside, until Steve or another attorney weighs in, for those who are thinking laches applies only to the portion of damages that are awarded as a result of willfulness, this is incorrect. Based on this ruling, the clock on damages that VRNG can collect starts with the date of filing this case. Thus, the damages payout is reduced substantially with this ruling. However, if a jury finding of validity and infringement follows they will award damages in some measure from this date and GOOG will be on the hook to license the patents for use through their expiration.
    31 Oct 2012, 05:16 PM Reply Like
  • Any reason the judge would wait until now to unleash this b.s.? You know, considering people invested millions of dollars into this? Seems like he should've let this this little cat out of the bag when he forced them into settlement talks 3 weeks ago!
    31 Oct 2012, 05:17 PM Reply Like
  • Any reason this wasn't brought up when the judge ordered VRNG and GOOG into settlement talks over 3 weeks ago? You know, before investors dumped in millions?
    31 Oct 2012, 05:18 PM Reply Like
  • How does this affect a potential settlement valuation? Acquisition? act?
    31 Oct 2012, 05:18 PM Reply Like
  • Disappointing news. Do you think their is still potential for Vringo to be awarded a royalty after this date?
    31 Oct 2012, 05:18 PM Reply Like
  • I'm hearing another side of VRNG's story is that the judge was actually saying if VRNG wants to claim wilful infringement (i.e. treble damages) they can only do it from September 15, 2011
    31 Oct 2012, 05:18 PM Reply Like
  • People should wait for official news to come out


    it's T1 halted news pending


    anything is possible
    31 Oct 2012, 05:22 PM Reply Like
  • So at $2.50 PSP, is it time to buy? VRNG still has other suits (ZTE) that have yet to go to trial.
    31 Oct 2012, 05:20 PM Reply Like
  • Steve, Thanks for the updates.


    It sounds like a bad news, which definitely put a limit on the speculation. It is impressive the PPS went wild.


    But on the other hand, IMHO, it seems more likely the VRNG may win the case.


    I have been conservative about the settlement if VRNG win, my guessmate was 200M to 400M. Now I move it closer to your range, 400M to 600M.
    31 Oct 2012, 05:26 PM Reply Like
  • Can some of you more experienced traders play a little hypo game with some of us? Worst case scenario, we all lose. But if there is a buyout or settlement, let's say around $8/sh, how long would I have to sell my shares and take the profit? It always seems that they announce these things after hours and institutions destroy these things.
    31 Oct 2012, 05:27 PM Reply Like
  • More experienced traders look at hypothetical situations but we adjust our positions based on risk/reward.


    Let me clarify. Before this came up, the stock was trading at about $4. Based on my analysis, downside was $1. Upside was stock could go to $8 to $9, let's say $8. That was a $3 downside and a $4 upside. Odds were better than 50% that VRNG would prevail. Hence I went long. However this was a straight coin flip. Hence I went in with little money so as to limit my losses in case the case went against me.


    Now, the upside is definitely less. I have taken some money off the table at a loss but I am still long VRNG. Note that I am not working out hypothetical scenarios but rather working on money management. That is the no. 1 skill of a trader.
    1 Nov 2012, 04:42 PM Reply Like
  • You can also look at spreads but since my target audience is beginners, I am not going into details of debit spreads, credit spreads, etc. here. Just bear in mind that spreads are a risk management strategy whereby you limit your possible gains if the trade goes in your favour or limit your losses if the trade goes against you. Once again it comes down to money management and risk management.
    1 Nov 2012, 06:28 PM Reply Like
  • Steve,
    Can the decision by the judge be appealed?




    31 Oct 2012, 05:33 PM Reply Like
  • Author’s reply » The laches decision, yes.
    2 Nov 2012, 02:49 PM Reply Like
  • Steve - This was stil a MIL going into the case wasn't it. I agree that the judge wanted to hear the evidence and since x-exam of GOOG and Rest happened yesterday, timing seems appropriate although it caught everyone off guard
    31 Oct 2012, 05:35 PM Reply Like
  • how can timing be appropriate with trial at 99% ?
    31 Oct 2012, 05:38 PM Reply Like
  • But how can the ruling be made before the judge hears all of the evidence? I would be more worried that the ruling was made at all. I think the judge is sending a message to the jury that GOOG did nothing wrong. If they were not in the wrong prior to Sept. 2011 and nothing changed after the lawsuit was filed, why would there be any reason to believe that they infringed?
    31 Oct 2012, 10:21 PM Reply Like
  • From what I have seen so far, this judge is rather good about explaining in layman's terms to the jury what 'this' or 'that' means, and will do so again in his instructions. If anything, and if the jury was even present for this decision, he'll go out of way to make it clear this was not a judicial perspective against VRNG, which could possibly be interpreted as a positive by the jury.
    1 Nov 2012, 09:11 AM Reply Like


    Steve have you heard anything on the rumor being illegitimate?
    31 Oct 2012, 05:36 PM Reply Like
  • According to the Wall Street Cheat Sheet:
    Vringo Crashes Over 40 Percent on Typo
    By Dan Ritter | More Articles
    October 31, 2012
    Shares of Vringo (AMEX:VRNG) tripped over a cliff at about 3 pm on Wednesday, crashing over 40 percent in a matter of minutes. Trading was halted, resumed, and appears to be halted again as confusion ensues following a report posted on that apparently contained false information.
    Vringo has been engaged in an ongoing and much-watched lawsuit with Google (NASDAQ:GOOG). The trial is expected to wrap up tomorrow. The article posted on PilotOnline claims that Google won a major decision in the trial.
    Catalysts are critical to discovering winning stocks. Check out our newest CHEAT SHEET stock picks now.
    Initially, the article stated that Vringo had told the jury that the company was owed at least $500,000 — a typo that was later changed to $500 million — but the report seems to be totally unconfirmed.
    There are reports that Vringo may not be able to claim damages from before the lawsuit was filed.
    Trading was halted after the initial crash, and resumed shortly. As news spread that the report was illegitimate, the shares began to rise before being halted again. As of 3:08 pm, shares were down 35.97 percent at $2.56.
    We will update this article as more information surfaces.
    31 Oct 2012, 05:36 PM Reply Like
  • As much as I had hoped today was about that typo (I caught that too), the sell-off was based on the judge's decision, not the mis-communicated amount.
    31 Oct 2012, 05:51 PM Reply Like
  • Steve: I think 600 - 700 million is too high.


    That number is based on 3.5% royalty payment up to 2016.


    I don't think that VRNG will get 3.50% royalty if the verdict is in favor of VRNG. 1.50% is more realistic.


    Another question is how much revenue will be used to calculate the royalty.


    Further question for future royalty:


    If VRNG is awarded 3.5% future royalty payment, Google may try to modify its algorithm to avoid the royalty payment at all.
    I used to be a software engineer and graduated from the same department Dr. Page, Google's founder and the inventor of the search algorithm, did for his Ph.D. study. I knew that Lang's algorithm is only one way to return a better search result. There are many other ways, which can return the same search result.
    31 Oct 2012, 05:41 PM Reply Like
  • Author’s reply » All really good points, James. I appreciate all your input. I think the thing to think about is that if the jury adopts the 3.5% royalty rate for past damages from Sept 2011 to present, then I think that is going to be a pretty significant factor for the Judge to use in determining future royalties. As for the revenue base for future royalties, I would think there is enough information in the record to award Vringo 3.5% based on 20% of Google's US AdSense revenues. I believe in Google's opening statement they themselves suggested that future royalties at 3.5% would be about $500 million, so I dont think think it is too rich to quantify Vringo's upside as still being $600 million or so.
    31 Oct 2012, 05:56 PM Reply Like
  • If future royalties are not at play, per a hypothetical Jackson decision, might VRNG seek an immediate injunction?
    31 Oct 2012, 10:20 PM Reply Like
  • From Percyway Updates


    Oct 31 Updates – As of 12:45 PM


    A quick updates that I got from court is that Judge is hearing out Vringo’s objections to judgement given out earlier. Vringo has argued that it is procedurely incorrect to have the judgement while the rebuttal is not yet complete. Judge has said that since Vringo didn’t have rebuttal on damages, he may have had to decide.


    While, the chances may look slim based on my limited legal knowledge whether this may affect the damages figure at all. However, I am told that Vringo may possibly have another rebuttal over this. Their lawyer is scrambling to get someone from Lycos days in court (most likely tomorrow).


    In short, let’s NOT panic.




    My own comment:


    I guess the ruling news is not totally confirmed and maybe that's why stock is halted
    31 Oct 2012, 06:13 PM Reply Like
  • More from 6:10pm update


    Trial has wrapped for the day and it has been an eventful day. As has been noted correctly elsewhere that the judge found for Laches and ordered damages to be measured beginning in September 2011. Back to that later. The afternoon session found Dr. Carbonell on cross examination by Google attorney David Nelson. Nelson took Carbonell through Rose, Culliss and Bowman and Carbonell was able to refute any suggestion that these patents anticipate the Prior Art introduced by Google. In fact it seemed clear sitting in the courtroom, and I have to believe to the jury as well, that Carbonell's testimony both direct and under cross is the best that we've seen in this courtroom period. He clearly knows these patents and systems in such a way as to be able to provide fluid examples in contrast to Nelson who just prepared himself for this particular case. Carbonell is someone with a lifetime of experience and it very much showed. It should be noted that when Nelson finished and VRNG counsel was able to redirect they said no.


    After Carbonell's testimony the jury was dismissed. Kenneth Brothers, VRNG's attorney argued that Jackson's ruling of Laches was essentially improper because they could not offer a witness against it and the upshot was that VRNG was able to enter what amounts to a witness report from Mark Blais at Lycos. In short the court was not inclined to reverse its earlier decision. So then the question of running royalties or lump sum payment came up. Google's Nelson tried to argue that there was nothing in the record on which to base a damage award which Judge Jackson did not find credible. He said that reasonable evidence exists for a jury to make a decision on damages. He referenced Dr. Becker's quarterly chart. Some positives for Vringo are that the Judge denied Google's motion for invalidity. He also denied a judgement as a matter of law against infringement. As to obviousness my understanding is that there would be some interrogatives given to the jury from the court based upon evidence.


    Judge Jackson will meet with counsel tomorrow at 9am and the jury will be back at 10:30am. The judge will decide based upon counsel input whether the jury will consider a lump sum or running royalties equation but Jackson pointedly said that all evidence for running royalties is certainly not excluded.


    So up next are closing arguments and jury instructions which should take maybe two and half hours or so. The question people will ask is what can VRNG still win if an infringement of the patents in suit is found. Keep in mind the fact that while Judge Jackson has penalized VRNG for the years before it brought its lawsuit that has zero to do with a finding of infringement. I think Steve Kim had it right in an earlier Seeking Alpha instablog where he says the damages and royalties could still be worth as much as $600-700M not including interest and fees. Therefore as has been my thinking all along as an investor, considerable upside remains. Notwithstanding the volatility experienced today, which thankfully I did not see much of, there is every reason to be optimistic. I have tried to insulate myself to a certain extent from the day to day panic of these boards since they are not always fact based. It was reported that the Virginian-Pilot may have provided a big assist to the stock drop in publishing an erroneous damages figure of $500,000 instead of $500M. Since the Pilot only covered the first day of the trial one would hope that after today, if reports are true, they don't stick around to cover the verdict. I will be there again tomorrow and I expect we will likely see a verdict on Friday.
    31 Oct 2012, 06:20 PM Reply Like
  • great update Kevin! Do you have a blog with real time updates? Thanks.
    31 Oct 2012, 06:43 PM Reply Like
  • Thanks KevinPorter.


    If they received some "assist" to report the wrong $$, then that is unethical. Amazing how one irresponsible reporter and paper can get away with damaging so many people.
    1 Nov 2012, 05:48 AM Reply Like
  • STEVE please tell me if what you just wrote happens..the 3.5% past and future royalities (which is what I assumed all along) then that would that put this stock at a price of at least $5.50 or $6?
    31 Oct 2012, 06:24 PM Reply Like
  • Jan
    I'd say even $8-10 actually
    31 Oct 2012, 07:19 PM Reply Like
  • A few clarification points:


    1. Google winning this JMOL motion does NOT mean it admitted infringement of VRNG's patents. In fact they specifically state they are not admitting such infringement, but that they were "notorious" with their use of such technology based on a blog post.
    See page 6 of their motion first full paragraph


    2. This ruling does NOT effect the denial of Willfull Infringement. VRNG did not ask for it in their original complaint. The Judge is not going to reverse his previous ruling just to "throw them a bone".


    3. Most people feel this judgement is tantamount to a late call by a referee in a basketball game (i.e. shooter gets fouled, ball is rebounded and going the other way, then ref blows the whistle).


    That is just not the case. Laches is a defense that must be proved by the defendant OR presumptively applies if the plaintiff waits six years after knowing of the infringement (see pg 1 of the Motion


    The Judge was correct in denying the MSJ on Laches ground. He reasonably wanted to hear evidence as to when VRNG (or its predecessor in interest) found out (or should have known) that their patent was being infringed.


    As such, it was correct that after both parties had presented their evidence, the Judge could rule on the JMOL. By making this ruling, the Judge implied that VRNG (or its predecessor) had actual or constructive knowledge of the infringement based on the July 2005 blog post by Google.


    Lamentably, I agree with the Judge's ruling (I am long VRNG). The blog post by google in July 2005 describes the Quality Score process in similar terms to VRNG's infringement claim. Not to be melodramatic, but VRNG's strength was also its greatest weakness. My only question is: Did VRNG's management know this going in and thus the "pre-determined" sales plan?


    4. An investor's (gambler's, if you please) focus should now be on what damages might be since the lawsuit was filed on September 15, 2011 to now, and what a reasonable royalty rate for the future might equate to and what multiple might be applied to those royalties. I do agree with some commentators that we are not looking at 15-30/pps post verdict outlooks, and its more in the range of 6 to 8/pps (as such if one is playing options, one should consider using a bull call spreads buying the lower strike prices and selling the higher strike price--i have a nov 4.50/7.50 spread on right now).


    Anyways, I hope this analysis helps. Good luck.


    (I am long VRNG--cashed out my short hedge today).
    31 Oct 2012, 06:36 PM Reply Like
  • Lemuelua..., your post is appreciable.


    Regarding 4) above and options trading, I am no expert--nor even an investment advisor and do not wish to get in trouble and should not be responsible for something adverse happening to someone else.


    However, the book "Options for the Beginner and Beyond" has been engrossing. In particular, it has a chapter with "More advanced content" entitled "Event producing Credit Spreads." Apparently, when one sells a put with a higher price and buys one at a lower price, the proceeds immediately appear in his or her brokerage account. Time would be the trader's friend in this situation, waiting for the options to expire worthless. In particular, and this is the advanced part, "Look for an even that produces a major move in the price of a stock accompanied by exceptionally high volume...must be an event that is essentially concluded after the news is out...This kind of situation pumps lots of extra time value into the front-month options as traders scramble...The idea is not to enter the credit spread until the dust has had a chance to settle...PLACE THE SHORT LEG OF THE SPREAD NEAR THE EXTREME PRICE ATTAINED DURING THE DRAMATIC MOVE [emphasis added]."


    Remarkably, Example 1 that he gives involves RMBS, which had a patent claim revoked by European officials on February 12, 2004. "On huge volume, the stock quickly fell from the $30 level to close at $24.35...The bad news was out and the damage was DONE [emphasis added]. This was a one-time type of event that was not likely to lead to any further related bad news...Trade: Buy 1 March 22.5 put and sell 1 March 25 put for a net credit of $1.25 per share...Max Risk = $125 [(25-22.5 -1.25) x 100 =125].


    "A good goal on these credit spreads is to receive a credit that nearly equals or possibly even exceeds the max risk...On March 19, 2004, RMBS closed at $27.21."


    I am sure that VRNG Nov calls will be priced differently, and maybe a day or two need pass in order to make sure that "Sellers have completely expressed their feelings." With two and a half weeks until expiry, this type of trade could be initiated just as rapid decay sets in. Buying the $2.50 put and selling the $4 put at this time would produce a net credit of $1.45 - $0.70 = $0.75. Max risk would be 4 - 2.50 - .75 = $0.75. Selling the $4.50 would create a higher credit...
    31 Oct 2012, 07:16 PM Reply Like
  • Interesting strategies, hadn't thought of a put credit spread. I like it :)
    31 Oct 2012, 07:25 PM Reply Like
  • I am learning here...actually per the book, if valid in this situation, which is doubtful because VRNG is trading much higher after hours, it would be to sell the $2.50 put and buy the$1 or the $1.50...
    31 Oct 2012, 07:53 PM Reply Like
  • Er, it would be to sell the one that is in the money.
    31 Oct 2012, 08:51 PM Reply Like
  • so what would goog and perhaps others, pending an unfavourable decision, think a yearly usage fee(liscense) for the future would be worth...........if so does it become a dividend income play.


    Depending upon retained earnings for what possible use, a question unto itself ( creating their own competitive search)within the bigger question of what they would have to payout.
    1 Nov 2012, 11:21 AM Reply Like
  • In all of this guessing about the new value of a win isn't that ONLY for this case? Where is Vringo's current earnings. the value of the NOK and other patents and pursuing this current patent against other parties?
    31 Oct 2012, 06:57 PM Reply Like
  • Keep in mind the shortsightedness of the market. No one but true longs will care about these factors you mention. If VRNG get a positive jury outcome, sell on the pop.
    31 Oct 2012, 07:01 PM Reply Like


    PG 36 on Laches
    JJ pulled a Q.E. dirty tactic today
    31 Oct 2012, 07:24 PM Reply Like
  • Vringo addressed the Laches issue and no mention of it until today by Judge J. Filing 427 on justia page 36 Ask yourself why JJ didn't let them rebuttal and the Day before Q.E. files for a motion not to recall Kosak....10/30/2012 748 MOTION to Exclude And Preclude Plaintiff From Recalling Mr. Kosak As A Rebuttal Witness by AOL Inc., Gannett Company, Inc., Google Inc., IAC Search & Media, Inc., Target Corporation. (Attachments: # 1 Civil Cover Sheet 1)(Noona, Stephen) (Entered: 10/30/2012)writing was on the wall.
    31 Oct 2012, 09:07 PM Reply Like
  • a 700M award would still be absolutely great


    anything from 500M to 700M would be great actually
    31 Oct 2012, 07:28 PM Reply Like
  • >>Thus, the damages payout is reduced substantially with this ruling. However, if a jury finding of validity and infringement follows they will award damages in some measure from this date and GOOG will be on the hook to license the patents for use through their expiration. <<


    Keep dreaming guys. This is the biggest bunch of baloney I've seen in a long time.


    GOOG is not 'admitting' anything, and has just won a crucial ruling. I seriously doubt if VRNG will get more than a few million, if anything, from GOOG. Their attorneys filed motions with incorrect figures and wildly speculative claims - and it's NOT clear whether these patents are relevant enough to even award the trolls ANYTHING!


    GOOG may give them a pittance for a perpetual license just to save the future harassment and distraction. That's the very best that VRGN can possibly hope for here - especially with a no-nonsense judge like Jackson. He obviously thinks they're on a fishing expedition here.


    I mean, think about it - a patent for delivering search results? That should have never even been granted, what a joke! VRGN is going down in flames here, grasping at any cheap trick to try to extort money from a world-class company.


    I'm pretty sure these troll suits will be killed in the next Congress - FOR GOOD!!
    31 Oct 2012, 07:55 PM Reply Like
  • If that was true Bill he would have thrown this you so called "biggest bunch of baloney" case out at the beginning, but if you have read any of the court documents you would know GOOG tried to side step their guilt of infringement every step of the way and your no-nonsense judge Jackson shot them down each and almost every time. So get real if this case was so ridiculous it wouldn't have lasted this long and going to the jury shortly...
    31 Oct 2012, 08:02 PM Reply Like
  • Author’s reply » Hi, Bill. The patent does not relate to delivery of search results. The patent relates to matching relevant ads to natural search inquiries, so that along with your search results, you get the most relevant AdSense ads that match the user's interest. That is something worth paying for.
    31 Oct 2012, 08:06 PM Reply Like
  • Bill, I have expressed a lot of skepticism, doubt and even disgust with VRNG, but I am actually more optimistic than your conclusion of "a few million" (though I hope it's a goose egg). I think that they jury will award them more than that. When it does, though, everyone will be stepping all over themselves to try to sell. This is a one-hit wonder for the most part - maybe some value from the NOK transaction. I had previously had an expected range of 1 for a complete loss in the case to a maximum of 10. I now think that this stock will have a real hard time ever getting above 6, even if they win $600mm.
    31 Oct 2012, 08:25 PM Reply Like
  • Bill you are so correct in your thoughts, who would of thought an idea that became Patented could have made a company worth $221Billion where 96% of their revenue comes from that one idea? Please let me know what Fund you work for and manage so me an all my friends could invest with you. Please let me know what this new company your referring to "VRGN" is so we can short it tmo.
    31 Oct 2012, 08:32 PM Reply Like
  • If you read the ACTG conference call, the company's CEO Paul Ryan talks about how their revenue sharing agreements on intellectual property obtained with upfront capital are traditionally 50/50 and sometimes 60/40. VRNG got a 65/35 deal on the NOK portfolio.
    31 Oct 2012, 08:37 PM Reply Like
  • Alan whats with all the negative and bad attitude for something you don't even own wishing ill will on people who have put their hard earn money into this stock for whatever reason is very nasty and crude of you. Comments such as " (though I hope it's a goose egg)" and the like hoping a company fail when you have no vested interested is disturbing to say the least. Like the saying goes if you don't have something constructive or positive to say don't say nothing at all is the best policy...
    31 Oct 2012, 09:13 PM Reply Like
  • I don't wish anyone ill will - I root for a GOOG victory in this court case. That's just my personal view (like rooting for the home team), though, as I have said in writing, I actually think VRNG wins. I have said plenty of value here, most importantly dialing down the irresponsible hyperbole propagated by some authors and many posters.


    Honest discussions can't preclude skepticism, and real investors care to hear the other side. Seeking Alpha is about an exchange of ideas. If you want just cheerleading, I suggest you try another website, like Yahoo. I actually recommended purchase of VRNG today to my private blog subscribers today if it becomes available at a specified price.
    31 Oct 2012, 09:50 PM Reply Like
  • Complete agree about the hype aspects Alan, article touting a share price of $100/share etc are just way out of place
    31 Oct 2012, 09:53 PM Reply Like
  • Everyone wants to get rich quick - easier said than done...
    31 Oct 2012, 09:57 PM Reply Like
  • Steve,
    The question is how much is it worth? With All the crazy numbers being thrown around(30,40, even 100 dollars a share)for Vrng, this latest event today in court will surely lower those figures. The real question is by how much? Even a 300 million dollar settlement/award should bring 3 dollars a share. Do you have a price in mind if Vrng wins/settles and do you put any kind of multiplier on that number? I believe X2 multiplier is conceivable.
    31 Oct 2012, 10:34 PM Reply Like
  • trbru87, your math is off a little - there are taxes and legal fees. You ask a great question. I have argued that not only is there likely to be no multiplier, but there is likely to be a discount. Time is money. If there is an award without settlement, then there goes time (for the appeal). As money comes in, you can count on this management team to do a few things most likely: Hand out stock to themselves and spend the money. Some think that winning vs. GOOG opens a floodgate to other settlements, but GOOG has commanding market share, making this insignificant. Others think that there is some multiplier due to a perception that these guys are value-creators. I disagree. Finally, if the price goes above $5, the sellers will flood. Ask yourself - if they win $300mm, are you more willing to buy or to sell at say $3.50 (if that's where it is)? Believe me, there are lots of people who do very well selling at 3.50.
    31 Oct 2012, 10:44 PM Reply Like
  • Alan's been pretty consistent throughout...appreciate the input and his angle on this. VRNG has been a serious learning experience / wild ride. Excited to see where we end up (believe it will be up, but who knows)
    31 Oct 2012, 11:41 PM Reply Like
  • Alan,
    I believe from the numbers I have seen 600 million is probably the top of what VRNG is asking for after the news today. I believe GOOGLE was offering 200 million to settle. This event from today will push the two sides closer. I think 400 million is right in between and a good number for both sides. Nobody knows for sure, we are all speculating. Taxes and legal fees should be around 100 million.
    I agree ,any price above 5 and there will be sellers. The validity of winning or a settlement I think will bring new buyers in and we may even see 6.
    As for buying or selling, in this situation, with 300 million in the bank and future lawsuits on the table I would be a buyer at 3.50.
    1 Nov 2012, 02:33 AM Reply Like
  • I'm kind of wondering where you're coming up with "I hope it's a goose egg."
    Rooting for the home team is all well and your choice, however does that mean VRNG doesn't deserve lawful financial return for violation of their intellectual property.


    Though VRNG could very well be deemed a "patent troll" (due to the aforementioned trial) this sly maneuvering shouldn't eradicate all of the settlement value, and thus property value. Simply math would show that they are looking for a small percentage of revenue from GOOG who used VRNG's intellectual property to profit into a global internet giant. If someone stole a car from me, the cops wouldn't turn and say I can have a few percent of the current MMR for every year the crook had the car. (obviously the auto insurance company would pay unless the vehicle was found, but you get the point)


    The law, VRNG is in the right to "some" amount of money. They own the patents. Jackson made a simple ruling that VRNG can't make GOOG pay through the nose for past violations of their patents prior to the filing of the lawsuit, but they will pay.
    1 Nov 2012, 02:33 AM Reply Like
  • trbru87, where did you hear that $200mm settlement offer?
    1 Nov 2012, 06:24 AM Reply Like
  • It's not clear to me what the correct legal outcome should be legally. I would think, as I have said, that VRNG will win a small amount, but, to be clear, VRNG didn't own the patents. Even Lang didn't own the patents. Lang reacquired them, for a small amount. I am a big fan of GOOG - I am rooting for GOOG. Ethically, I am against the notion of patent trolls. I hope that clears it up. Investment-wise, I don't have a bias, one way or the other. There is a price where it's a fair bet (and that's all it is now - a bet), but that price just dropped substantially yesterday due to the massive reduction in the amount of cash that VRNG can win. The issue of future royalties is what it's all about now, as a $100mm cash alone won't drive a big jump in valuation from 2.58 (actually, my valuation would be lower if that's the final answer). If they are able to win future royalties, even then, it's quite uncertain how it plays out (will GOOG be able to implement a work-around?).
    1 Nov 2012, 06:38 AM Reply Like
  • My concern is the Nokia patents are from the late 90"s so latches will effect that whole portfolio won;t it? Also of concern is VRNG has stated they will only be keeping 80% of any award as profit that and the fact you have to pay taxes on the award. Pretty depressing imo.
    1 Nov 2012, 07:00 AM Reply Like
  • Like anything else on this case it was "reported" and put online. There is no way anyone would know if Google offered anything at all really. We are all just guessing. Personally, i do believe 200 million is the low end of this case. The high end being 800 million.( no way vrng gets that).
    Vrng has 45 million in cash , call it 25 million for the nokia patents(I believe they are worth much more), and The ringtone business.They also have warrants out there too that if exchanged at 5.06 a share results in 20 million more for the company. A base of 1.50 a share seems real to me. Anything won in this lawsuit adds to it.
    2 Nov 2012, 01:51 AM Reply Like
  • Ok, shorten the time-frame, from 2006 to 9/15/2011.
    Now multiply your damages by 5 to make up the difference!
    Hey, the judge can screw them over in the 11th hour, why not give it right back to them?
    31 Oct 2012, 10:05 PM Reply Like
  • Are we D.O.A. with this news. How bad is VRNG positioned going into a verdict? Anyone have an idea?
    31 Oct 2012, 10:11 PM Reply Like
  • They are positioned no different. The only thing is the past damages. I have posted my times on IHUB about this. They just bought the patents... what entitles them to past damages. I have always been in it for future royalty which will outwiegh past damages. Yes it would have been nice for past damages... But remember, Googles makes more and more money each year on what is Vringo technology now.


    P.S. It would be nice if Vringo keep the stock halted until the Verdict is announced. I just wish court was not canceled on Monday.
    31 Oct 2012, 10:43 PM Reply Like
  • 500M?? wasnt tht the magic number before we learned vrng claim is limited to sept11? shouldnt that be divided by 5, and then tht really explains price action today; pretty sure big money can do simple math. nobody is hear for future royalties; thy may tell themselves this tho...
    31 Oct 2012, 10:54 PM Reply Like
  • The judge can decide on a royalty % per year or lump sum amount from what i have read. That is up to the judge.
    31 Oct 2012, 11:02 PM Reply Like
  • Getting a report here that Judge Jackson was short Vringo. Chatter is that he will be removed tomorrow...
    1 Nov 2012, 01:47 AM Reply Like
  • <joking>


    c'mon.... laugh
    1 Nov 2012, 01:48 AM Reply Like
  • Marpha,


    It is hard to laugh through the tears......sniff....


    Anyone know if VRNG can claim or get treble damages now?
    1 Nov 2012, 05:58 AM Reply Like
  • yvette.grier, treble damages were off the table before and remain so from what I have read. They didn't pursue "willful infringement".
    1 Nov 2012, 06:27 AM Reply Like
  • marpha - are you still long VRNG?
    1 Nov 2012, 06:19 PM Reply Like
  • I agree with Alan - win, lose, or settle, VRNG pps is going down. Longs should be praying for a buyout, which is unlikely as GOOG can hardly feel threatened.
    1 Nov 2012, 02:33 AM Reply Like
  • 2.5 from 5.7 and bears still want down even if VRNG wins ?
    1 Nov 2012, 06:28 AM Reply Like
  • If they settle, I don't think settlement amount will be high enough to justify any huge multiple jump in pps that would be sustained. There would be a pop but the selling would take care of that quickly. If there is a favorable jury verdict for VRNG, it doesn't matter what the amount is because an appeal is guaranteed and there would be no immediate cash payout or possibly never a dime received.
    1 Nov 2012, 09:27 AM Reply Like
  • At this time VRNG Management is thinking about another Acquisition which will lend to their bottom line. VRNG merged with IP Engine in 2012, I do believe they are on the hunt for another company that will compliment thier ringtone business. I do not see them as only going forward as a Patent Troll. It is possible VRNG will use it's existing Technology to start it's own Search Engine.
    1 Nov 2012, 06:44 AM Reply Like
  • How do you think this will impact ZTE negotiations?


    Also, any new news on T1 halt?
    1 Nov 2012, 07:16 AM Reply Like
  • Own Search Engine would clearly be very interesting,
    especially for the ramping mobile industry


    To be noticed that the 1year left in the past damages
    is clearly the richest of the 'old' 6


    Getting 600-700M would still be huge, worth $8-10 pps imo
    (remember the 500M settlement = $8 consensus just last 2 weeks)


    Still T1 halted
    1 Nov 2012, 07:54 AM Reply Like
  • More AM Court Updates


    GOOG workarounds to avoid royaties ?
    Effective workarounds are far from easy if one wants a system to continue operating the same way. GOOG is gonna pay 'only' 3.5% of 20%.
    3.5% of 20% is just 0.7% of the total. Worth trying a new system ? No


    Claims ?
    A finding of infringement leads to a damage award of $120-150M which includes the co-defendants. The royalty is likely to be 3.5% since it is the only royalty rate that has been offered at trial. All in I'm with Steve Kim on his $600-700M figure. I am puzzled by the idea that the damage award timeframe being shortened would give the jury pause though. I ran this by a couple of female friends (mid 40's) today because I wanted to test my thinking. Since the jury has been shown all sorts of documents leading them to assume infringement the six previous years to 2011 my friends felt that Google had actually sort of wormed out of being responsible for that and were themselves inclined to offer all they could for the 14 months of infringement if they felt Google had infringed. I know that is but one way to see it yet that was my thought too.
    1 Nov 2012, 09:17 AM Reply Like
  • Trading still halted.
    1 Nov 2012, 09:31 AM Reply Like
  • still halted?
    1 Nov 2012, 09:34 AM Reply Like
  • it's trading right now


    halt lifted at 09:33:46
    1 Nov 2012, 09:38 AM Reply Like
  • Can anyone explain to me why the stock opened in after hours trading yesterday at 3.43 only to open today at 2.56 again? Also I find it a little odd that the comparison to VHC's situation has not been brought up in relation to VRNG. VHC received a settlement of 200 million and currently trades in the mid to high 20's (they were trading in high single digits before that). So how would a 500-700 million dollar settlement not cause a PPS increase? I love how people are making it seem like winning 500-700 million dollars is somehow a loss.
    1 Nov 2012, 09:51 AM Reply Like
  • it never reopened till today at 09:33:46


    you have wrong data feed
    1 Nov 2012, 09:54 AM Reply Like
  • Kevin - Actually, Google finance and market watch both showed a $3.4 AH price tag but when the market closed AH as well, it went back to the closing price
    1 Nov 2012, 10:20 AM Reply Like
  • yes a broken single trade


    it happens quite often


    stock never reopened actually
    1 Nov 2012, 10:23 AM Reply Like
  • VHC is very different. They both start with V and both are involved in patents, and that's where it ends.
    1 Nov 2012, 10:47 AM Reply Like
  • Google is not a broker. As KP stated, it never traded.
    1 Nov 2012, 11:36 AM Reply Like
  • @ alan


    ridicolous comment
    2 Nov 2012, 07:16 AM Reply Like
  • Thanks, Kevin. Please, tell us how they are similar beyond what I said. Are VRNG's patents beyond 2016? Are they global? Do they have more tunas to land if they collect a maximum of about $600mm in this case?
    2 Nov 2012, 08:03 AM Reply Like
  • Yes, yes and yes. Nokia patents.
    2 Nov 2012, 08:07 AM Reply Like
  • relax and wait the the verdict
    2 Nov 2012, 08:16 AM Reply Like
  • Hi Steve, I'm curious why the motion to limit damages from 2011 onward was such a surprise to everyone? You would think that with all of the experts following the case, someone would have seen it coming. Can this be appealed in the future by VRNG...thoughts?
    1 Nov 2012, 09:53 AM Reply Like
  • Kevin,


    I saw the 3.438 on also last night.




    In order to compare VHC and VRNG I would like to know if they had the same number of outstanding shares.
    1 Nov 2012, 10:15 AM Reply Like
  • a broken single trade
    1 Nov 2012, 10:18 AM Reply Like
    "Now, another small calculation. From 2005 until 2011, Google's damage potential was $600 million. This was in 6+ years; however, in the last one year, that has become $200 million because Google is growing at a better pace now. If this growth continues, we can assume potentially another $1.25B in just damages+royalties until 2016. So, that gives us a total of $1.45B from Google alone.


    "However, lets not forget the most important aspect of this trial - that this trial is a trial in more than one sense for Vringo. If it can win this case against Google, it is not only going to make a modest ($1.45B, modest?) amount of income from Google, but it will also have extremely strong cases against almost everyone else in the market.


    "Vringo can potentially target every big and small company that uses Google's Adwords system. This concept clarifies why Vringo sued Target (, AOL (, Gannett ( and IAC ( as co-defendants in this one lawsuit. Some of these companies directly use the technology allegedly taught in the patents in question; some used them through Google. Everyone is potentially facing damages.


    "Even more interestingly, Vringo can sue Microsoft ( for technology used in Bing, Yahoo ( for its own search engine, Facebook ( and Linkedin ( for their targeted ads technology, because allegedly all of these infringe on the Lang/Kosak patents on Relevance Filtering Technology. Winning big money on these so-called patent troll lawsuits is not unusual; Virnext ( got $200 million from Microsoft in 2010, and is now suing Apple for more. Vringo is also suing ZTE for infringing on its mobile technology portfolio; it can now target Huawei and other mobile manufacturers too. Basically, winning a lawsuit like the one against Google creates a windfall for Vringo not only in more money to continue its IP litigation operations, but also a reputation among future defendants that will quickly lead to settlements."
    1 Nov 2012, 10:16 AM Reply Like
  • not sure about 1.45B


    Imo it's more like 120-150 (past) + 500-650 (future) = 620-800M


    I agree about the extra, MSFT YHOO etc
    1 Nov 2012, 10:20 AM Reply Like
  • Steve did you see VRNG latest filing Proffer to latches. Can you comment on this?
    1 Nov 2012, 12:23 PM Reply Like
  • 2012 50B conservative
    90% adwords 45B
    49% US 22B
    20% of it 4.4B
    3.5% = 154M


    2013 +10% higher is 170M
    2014 +10% 187M
    2015 +10% 206M
    2016 +10% 227M
    Total future royalties 790M assuming a conservative 10% growth


    +154M past = about 950M total


    Pretty big sum
    1 Nov 2012, 12:30 PM Reply Like


    don't see how Jackson doesn't reverse the Laches ruling


    the ruling had no base
    1 Nov 2012, 03:49 PM Reply Like
  • seems it might really happen
    1 Nov 2012, 04:05 PM Reply Like
  • Greatly appreciated your remarks on the trial yesterday. Assume you weren't in the court room today.
    1 Nov 2012, 06:31 PM Reply Like
  • Hi murphman,


    Thanks for the link to the Proffer. Although I still couldn't understand what do Laches and Proffer mean, after reading the entire Proffer Vringo submitted, it really-really doesn't make any sense to limit the damage in the initial years.


    I was again clearly known/stated in pg8 that:
    "Google was aware of the patents-in-suit prior to September 15, 2012. Google owns U.S. Patent No. 7,647,242, and the ‘242 patent lists the ‘420 patent on its face. (PX 0416). In particular, in an Office Action dated September 30, 2003, the ‘420 patent was cited as a reference made of record in the prosecution history of the ‘242 patent. (PX 0417).


    In a 2008 Google email, Google’s employees discuss Don Kosak, one of the inventors of the patents-in-suit. (PX 0408, 0409). Google also produced articles from 1996, 1997 and 1998 that were obtained from its corporate archives describing Ken Lang and WiseWire, which was a precursor to the technology described in the patents-in-suit. (PX 0410, 0411, 0412, 0413). Google produced a patent used as a deposition exhibit in a prior Google litigation, as well as another patent presumably produced as alleged prior art in this litigation. (PX 0414, 0415). The ‘799 patent is listed as a cited reference on the face of these patents."


    I couldn't understand why JJ made the decision at this particular moment with all this evidence on the table.


    Jeez man, jeez...
    2 Nov 2012, 04:50 AM Reply Like
  • Can anyone explain the Proffer (?) that was filed today? Looks like it excludes Laches as a defense for damage estimates as it relates to the remaining defendants...
    1 Nov 2012, 03:50 PM Reply Like
  • For those of you keeping a close watch on VRNG during the work day, what websites do you keep open or check often to get updates on court proceedings or stock news? Checking SA, yahoo! finance, etc. are great but any others?
    1 Nov 2012, 05:56 PM Reply Like
  • Get on Twitter.
    1 Nov 2012, 06:21 PM Reply Like
  • Who should I follow? Trying to get some followers so I can get an up to the minute report on verdict! Thank you for the help.
    2 Nov 2012, 10:29 AM Reply Like
  • edvacourt;_ylt=AtXUUWD7ZeM5lpEg...
    2 Nov 2012, 11:38 AM Reply Like
  • If you use ThinkOrSwim as your broker, you can get live news from Benzinga using the LiveNews "app?" on the left hand side of the screen. Or Twitter as wiesemc stated.
    1 Nov 2012, 06:22 PM Reply Like
  • anyone hear about the proffer to latches that can explain...?
    1 Nov 2012, 07:15 PM Reply Like
  • Steve, as usual thank you for explaining this in relatively easy to understand language. I foresee a future as a professor at a law school for you. My question...yes, there is this. I'm operating on two assumptions: 1) Jury verdict is in VRNG's favor and 2) GOOG appeals OR 3) Jury decision in GOOG's favor and 4) VRNG appeals.


    OK, dealing with 1 & 2 first.


    If they occur, can VRNG bring up Judge Jackson's decision re: damages pre-2011? If so and the Appeals Court finds that Judge Jackson made a mistake, what then happens?


    Now, 3 & 4.


    If GOOG wins the jury segment, I feel it is a given that VRNG will appeal but what happens? It seems a null argument to argue for damages since the jury has ruled that no infringement occurred.


    Last question. If VRNG wins the jury segment, can they still appeal Judge Jackson's decision re: prior to 2011?


    Thanks for any clarifications you can make.


    1 Nov 2012, 07:27 PM Reply Like
  • Author’s reply » Hi, Toof.


    I think your analysis is exactly correct. If Vringo wins and the jury awards damages from and after the date of this lawsuit, then Vringo would have an opportunity to appeal Judge Jackson's ruling limiting damages prior to the lawsuit. The appeal process is based primarily on (1) the existing trial court record (i.e., only evidence and argument that was presented to the trial court, which is why Judge Jackson allowed the proffer, so that it would be part of the appellate record); and (2) the parties' written arguments to the appellate court in their appellate briefs. There is no "trial" at the appellate level, although the appellate court may entertain a short oral argument on the briefs.


    On the other hand, if Vringo loses the trial, and the jury finds there is no infringement or that the patents are invalid, then you are correct, the issue of pre-complaint damages becomes somewhat moot, if the jury found that Vringo is not entitled to any damages at all. While they would still have the ability to appeal the pre-complaint damages issue, the appeal would have to be tied to an appeal of the jury verdict's decision of no liability. In my view, Vringo would be highly unlikely to be able to convince an appellate court to overturn a jury verdict, although there may be some appealable issues in Judge Jackson's pretrial rulings that Vringo could latch on to in seeking a new trial. However, as we have seen, Judge Jackson's pretrial rulings were pretty favorable to Vringo, so there aren't any real obvious appealable pretrial issues out there that favor Vringo.
    3 Nov 2012, 02:28 PM Reply Like
  • Holy crap. Twitter is amazing. Looks like jury is going to rule for us. They are asking judge questions about question #2 on the jury card, which means they will PROBABLY vote google infringed. PAYDAY. Here's what i just read:


    "At about 10:10 this morning the jury asked a question regarding whether they could move to number #2 on the Verdict sheet before completing number #1. In the presence of counsel the jury was called back in and the Judge said if you are referring to breaking down the questions into subsets, meaning the 420 patent and the 664 patent, sure you can consider those any way you want. But he said they should not move on to number two as depending upon what they decide on #1, numbers #2 and #3 may not be necessary. I see this as the first sign that the jury is being efficient and in all likelihood has decided question #1 in favor of the plaintiff. Here is my reasoning quickly with some speculation on the juries thoughts:


    A) If there is no #1 no need to go to #2 (I think this is the best argument)
    B) If trying to sort out which claims #1 applies to one would want to decide number #2 claim by claim to see if number 1 and number 2 match up. Keep in mind that Judge Jackson has instructed the jury on the use of the doctrine of equivalence which states basically that they don't need to be exact if the resulting function is determined essentially to be the same. You can look up the U.S. Supreme Court's rulings on this which is why simple workarounds often don't pass the non-infringement test. Being instructed they can use this doctrine was a big win for VRNG, one that GOOG counsel objected to.
    C) If the jury believes that #2 is going to be done quickly they can concentrate on #1 claims (logical)
    D) If jurors feel they have more or less decided number #1, they may, just to be efficient, want to set #1 aside and get #2 out of the way fast. These are all my own impressions based upon my own version of game theory in this case."
    2 Nov 2012, 11:11 AM Reply Like
  • Where on twitter did you see this? I can't seem to find any info.
    2 Nov 2012, 06:09 PM Reply Like
  • wow...really quiet out here....????????
    2 Nov 2012, 01:29 PM Reply Like
  • pin drop sound made here.....................
    2 Nov 2012, 01:36 PM Reply Like
  • Court Update


    Court was called to order just past 5:00. The jury was dismissed until Monday and admonished not to speak to anyone about the trial or do their own research. In a moment of levity, Judge Jackson said "I didn't think we'd be back here next week ladies and gentlemen, but I'll see you at 10:00 on Monday." He also thanked the jury for their service and a hard day's work.
    2 Nov 2012, 07:01 PM Reply Like
  • To the Judge, Jury, traders, and commentators the night this is over.



    This Drama was Most fun you can have without getting arrested or deployed.
    3 Nov 2012, 09:35 AM Reply Like
  • Here is a couple of updates this morning on twitter from Neil@quantrec:


    $VRNG Breaking News - Question of Jury
    Jury brought back a question at 10:10 which the court addressed. "Is there a date to use when considering 3rd party infringement (i.e. non-Google defendants)?. Judges response "Date of infringement is relevant only if you are calculating damages." The judge referred them to the record, where they can see that they would all be at the same date. What can be inferred by this question is that the jury did not understand how far back they can go to calculate damages with the non-Google defendants. This may be very good news for Vringo.


    $VRNG Edvacourt Update On Lunch Break $GOOG
    "The jury is having a working lunch. The attorneys are out of the courtroom. They were informed that they would be notified if there is an update.


    I might add that the courtroom optics showed the Google attorneys a bit more unsettled than I had seen them thus far. Gone was the joking around and goofy banter. The Vringo attorneys by contrast have always appeared to comport themselves in a more serious fashion. Even with the last question from the jury that seems favorable to them, they maintain their composure.


    I do not want to overstate this for Vringo, but it does seem that the judge took great pains to not overtly draw a connection between the jury's question and damages, although one would wonder what other connection could be drawn from his response.


    It seems if one were on the Google team and had been ordered not to engage in a settlement up until this point, now might be a time to reconsider. I'm guessing the jury (given lunch) will not come back with any updates, questions, etc. until 2:00pm at earliest. That would clearly give the sides enough time to have a substantive conversation. It is beginning to look like this could well be wrapped up today and therefore there is a clear and present urgency."
    5 Nov 2012, 01:02 PM Reply Like
  • Settlement will not be in discussion today. It may take few months to reach any settlement.


    All are waiting for the verdict.


    Google buys VRNG? At what price? No. VTNG want to win more.
    5 Nov 2012, 01:29 PM Reply Like
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