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Daniel B. Ravicher
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Daniel B. Ravicher is a registered patent attorney who frequently consults with investment banks, hedge funds, and individual investors on legal issues that may materially affect the value of publicly traded companies. In addition to private consulting, Mr. Ravicher also regularly publishes... More
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  • Update On Google Request To Postpone Vringo Ongoing Royalty Motion (Ravicher Report) 3 comments
    Jan 19, 2013 2:12 PM | about stocks: FH, GOOG

    I have written previously (here, here and here) about the patent infringement suit brought by Vringo (VRNG) against Google (NASDAQ:GOOG), which appears to be highly material to Vringo's valuation (currently about $260M) due to the possibility of receiving hundreds of millions of dollars from Google in royalties.

    In November 2012, a jury found two of Vringo's I/P Engine subsidiary's patents to be valid and infringed by Google and its customer co-defendants and awarded Vringo $31M in past damages. Vringo then filed in mid-December a post-trial motion asking the Judge to award it an ongoing royalty to be paid by Google for continued infringement of the patents until they expire in April 2016. Vringo specifically asked the Judge to award it approximately 1.5% of Google's U.S. AdWords revenues (Vringo is technically requesting a 7% royalty rate applied against the 20.9% extra profit Google makes from infringing Vringo's patents, so I've merely multiplied those two percentages to get the 1.5% figure).

    As I mentioned in my January 3 article, Google made a request that the Judge postpone any further briefing or consideration of Vringo's motion for the imposition of an ongoing royalty because, Google argued, the motion could be rendered moot if the Judge were to grant some of Google's post-trial motions, which include requests to overrule the jury and find Vringo's patents invalid and/or not infringed. Google also argued that a postponement would give the parties time to negotiate a reasonably royalty, which I called a flip-flop by Google, because they had consistently argued up until then that at most a lump sum payment was appropriate and disputed the legitimacy of having to pay Vringo any royalties.

    In this Ravicher Report, I review the relevant dates and filings that have occurred regarding Google's request to postpone Vringo's motion for ongoing royalties. I also provide my analysis of the likelihood that Google's postponement request will be granted by the Judge. I may submit the content of this Ravicher Report to the Seeking Alpha editors for publication. Seeking Alpha publishing policies prevent me from submitting content that I had previously made available for free. Thus, if you do not wish to pay for this Ravicher Report, I respect and understand that. If I decide to submit its content to Seeking Alpha as an article and the Seeking Alpha editors review and approve my article, they will publish it then for free.

    Disclosure: I am long VRNG.

    Additional disclosure: Please see all my previous articles, instablogs and tweets for additional disclosures. I have previously been long, short and had no position in VRNG. I am, as of the publication of this instablog, long VRNG, but VRNG is, in my opinion, highly volatile, as is the litigation process in which it is involved and, therefore, I may change my position in VRNG at any moment for any reason or no reason at all.

    Stocks: FH, GOOG
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Comments (3)
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  • alvarovc
    , contributor
    Comments (132) | Send Message
    Dan thanks for the article. One question: I understand that GOOG's postponement motion only applies to the ongoing royalty right? If that's the case then JJ could give his final ruling regarding past and supplemental damages any time?
    19 Jan 2013, 06:40 PM Reply Like
  • Gallowyn
    , contributor
    Comments (31) | Send Message
    Something I believe a lot of us would like to know, but no one is coming out of the mix with expertise in this area to answer it.
    19 Jan 2013, 08:27 PM Reply Like
  • Daniel B. Ravicher
    , contributor
    Comments (321) | Send Message
    Author’s reply » Vringo's MOTION FOR AN AWARD OF PREJUDGMENT INTEREST, POST-JUDGMENT INTEREST, AND SUPPLEMENTAL DAMAGES FOR DEFENDANTS POST-DISCOVERY / PRE-VERDICT INFRINGEMENT was fully briefed as of December 7, so the judge could rule on it at any time. However, I expect he will wait to rule on it at the same time he rules on some or all of the other post-trial motions, including the parties' respective motions for new trials on damages, which have not yet been fully briefed.
    21 Jan 2013, 10:09 AM Reply Like
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