Entering text into the input field will update the search result below

Vringo Vs. Google: Jury Verdict

Nov. 07, 2012 12:23 PM ETXWEL, GOOG51 Comments
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Last week I predicted that the I/P Engine vs. AOL et al. -- aka Vringo (VRNG) vs. Google (GOOG) -- trial would result in a jury verdict finding Vringo's patents infringed and not invalid and then award damages of $95M. Today the jury returned its verdict that the patents were infringed and not invalid and awarded approximately $31M in damages.

Both sides have many possible appeals they can make and the judge will decide how to handle future infringement by Google, either by issuing an injunction or awarding an ongoing royalty. The jury's $31M damages calculation was based on its assessment of a 3.5% royalty rate. Obviously, this rate is not applied against Google's total revenues, and indeed that would be inappropriate.

Thus, even if the judge awards an ongoing royalty of 3.5% against Google, and even if Google loses its appeals, and even if Google cannot develop a design around that avoids infringing Vringo's patents in the future, a rough approximation of the annual expectation to Vringo may be about the same $31M awarded by the jury today, as that was the amount they awarded for infringement since September 2011, roughly a year ago.

Vringo can appeal the Judge's decision last week limiting their damages to only one year instead of the up to six years it was seeking.

UPDATE Nov 7 @12:19PM: The Jury Verdict Form is now available.

Disclosure: I am short VRNG.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.