I've written previously about the Vringo (VRNG) v Google (NASDAQ:GOOG) patent infringement case, where the jury awarded Vringo's I/P Engine affiliate a mere $31M, which was a small fraction of the $493M it asked the jury to award. The litigation appears highly material to Vringo's valuation, currently around $250M, as some suggest it could provide future royalties for Vringo from Google of hundreds of millions of dollars. I have opined against this expectation because I believe Vringo's future royalty expectation is on par with the jury award, which was similarly hoped by Vringo to be in the hundreds of millions but resulted in only tens of millions.
While the Court awaits the parties post-trial motions, which Google has already suggested will include a motion to decrease the verdict even further, not much coverage has been given to a separate front Google has successfully opened against Vringo's patents at the U.S. Patent and Trademark Office. Even if the court awards Vringo an ongoing future royalty against Google, something it has not yet done, and something Google has indicated it will vigorously oppose, there are several ways Google can reduce or eliminate altogether paying any such future royalties to Vringo. I've previously mentioned appealing the jury's verdicts of infringement and validity and designing around the patents, but Google's attack on I/P Engine's patents at the PTO could also affect Vringo's entitlement to future royalties. I discuss that risk to Vringo's future expectations
in an article I submitted this afternoon to the Seeking Alpha editors for publication.
A preview copy of the article is available from here. Note that Seeking Alpha publishing policies prevent me from making preview copies of the article available for free. If you do not wish to pay for a preview copy of the article, I respect and understand that. If you wait a day or two for the Seeking Alpha editors to review and approve my article, they will publish it then for free.
Disclosure: I am short VRNG.