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If you read Ken Lang's comments to the Patent Office you will clearly see that he makes very strong points on the merits of his invention versus the assertion of the filers. I am not realy worried about these issue. I see all this as red herrings. The short position is large , we are going to get rulings that will affect the stock price shorts would like to cover lower it is as simple as that .
If you read what he said on STocktwits and his instablog on Seeking Alpha you would not say this. His goal seems to be to discredit Vringo in any way. He does not lie but he does not provide a balanced picture. This is the problem. Some people will take his word because he is a professor and a so called patent attorney. One poster on Stocktwits said his reputation among patent attorney's is very poor. He has worked for Google in the past. His Youtube video says a lot about what he feels towards companies like VRNG. Finally his opinions really are not relevant in themselves. However I have notice that there are groups of short traders that use his articles to attack VRNG. There is more and more institutional investing here, one investor on Rachivers blog said he was taking his attacks personally and he would stand with a 500,000 or more bid if necessary.
By pre-announcing his article perhaps we don't get the knee-jerk reaction we would have had otherwise, I guess we will see.
Ravicher's Youtube video he has worked for Google
Solo's Post on Investor village edited and corrected for errors...
http://www.investorvillage.com/smbd.asp?mb=17604&mn=1404&pt=msg&mid=12375151
Final Post II (Edited Version)
Final Post 2 (Edited Version)
I have returned to correct an error. Please be patient and I will try to reward your patience with some further insights into the Vringo case. But first, I must say that these postings were only intended for the good people in the small community of Investor Vlllage who are mostly concerned and interested investors in Vringo. That is why I have posted approximately 20 articles on the case. It is for them. Since leaving, I have been attacked verbally and insulted relentlessly. "Who is that guy? How do we know that he is even a lawyer !!" Honestly, I don't know how Dan Ravicher does it! He must be made of steel. So now I have to make this far more complicated than I ever wanted. I apologize to the Investor Village people.
I ask you to refer to an earlier post - 'Market Uncertainty'. I concluded by asking you to look for a Rule 59 application by Vringo to alter the Judgment. The Clerk Entry Judgment incorporates the "general verdict of the jury with answers to written questions". The form of the Clerk Entry Judgment was approved by the Court. Once approved, in form, it was entered promptly by the Clerk of the Court. The Rule 58 requirement of a separate document (Judges expanded final judgment, findings etc) is not required. This is so that a Rule 59 motion can be brought within 28 days from the time of the Clerk's entry of the judgment ( 'Clerk Entrry Judgment'). The Rule 59 Motion to alter the judgment effectively deals with the important Google damages issue. A Clerk Entry Judgment is not a final judgment. So when the rules refer to the 'entry of a judgment' and you are dealing with a Rule 59 application you disregard the Final Judgment requirement of a separate document (Judge's decision and findings etc.). I realize the importance of being correct about this. That is why I am taking the time to do this. It is my understanding of the rules of court procedure. Let others disagree! Accordingly, Rule 58 deals with (a) the 'form' of the judgment and (b) the time of entry of the judgment. Approval of form and time of entry.
The Clerk is required to enter the judgment promptly unless a separate document (Judge's findings etc.) is required.. The separate document requirement can otherwise delay the time of entry of the Judgment. When the requirement is removed, then the Clerk must have the form of the judgment approved by the judge (court) and the Clerk must promptly enter the judgment..
Now go to PENAKI's posts. PENAKI is a board member who has diiligently posted all of the Pacer docket entries. Go to Pacer Document 801. That is the Clerk Entry Judgment. The time of entry is November 20, 2012.
Under Rule 59 - a motion to amend a Judgment - Vringo has 28 days from the date of entry to file a motion to amend. That date is December 19, 2012. In the previous post I mistakenly said that the date of entry was November 7, 2012. I was in error.
The Clerk Entry Judgment serves the function of a Judgment for Rule 59 purposes. Otherwise, the Plaintiff would have to wait until the final judgment in the form of a separate document is delivered by the court and that could be up to 150 days from the entry of the Final Judgment in the civil docket. But the Clerk Entry Judgment is a judgment in approved form and it has been entered by the Clerk of the Court. Most importantly, it reflects the jury verdict.
In my last post I referred to the Clerk Entry date of the Judgment as November 7, 2012. I made a mistake. The Clerk Entry date was November 20, 2012., I could not let this kind of mistake and the conclusions that I drew from it stand. I had no choice but to return to correct the error.
Rule 58. Entering Judgment
(a) Separate Document. Every judgment and amended judgment must be set out in a separate document, but a separate document is not required for an order disposing of a motion:
(1) for judgment under Rule 50(b);
(2) to amend or make additional findings under Rule 52(b);
(3) for attorney's fees under Rule 54;
(4) for a new trial, or to alter or amend the judgment, under Rule 59; or
(5) for relief under Rule 60.
(b) Entering Judgment.
(1) Without the Court's Direction. Subject to Rule 54(b) and unless the court orders otherwise, the clerk must, without awaiting the court's direction, promptly prepare, sign, and enter the judgment when:
(A) the jury returns a general verdict;
(B) the court awards only costs or a sum certain; or
(C) the court denies all relief.
(2) Court's Approval Required. Subject to Rule 54(b), the court must promptly approve the form of the judgment, which the clerk must promptly enter, when:
(A) the jury returns a special verdict or a general verdict with answers to written questions; or
(B) the court grants other relief not described in this subdivision (b).
(c) Time of Entry. For purposes of these rules, judgment is entered at the following times:
(1) if a separate document is not required, when the judgment is entered in the civil docket under Rule 79(a); or
(2) if a separate document is required, when the judgment is entered in the civil docket under Rule 79(a) and the earlier of these events occurs:
(A) it is set out in a separate document; or
(B) 150 days have run from the entry in the civil docket.
May we move on!
Some have questioned my reference to the need of the judge to correct clear error and prevent manifest injustice. I am sorry if you do not like the phrase. It is important to understand how and where they apply. It relates to the Court's duty to exercise sound judgment in the exercise of his discretion re altering the judgment.. It also applies to the exercise of his duties under rule 60. If you will go to the Plaintiff's Reply statement at page 15 and to the Footnote 5 statement that we have been focused on, you will see that the footnote is is a footnote to a particular phrase used by the Plaintiff in his Reply. The phrase is : :"clear error". The point that I was making was that if the Judge chose not to inquire into the issue of the decimal 'transposition', one could argue that a manifest injustice had occurred. But once he decides to look into the matter, Vringo argues that it is 'clear error'. In a nutshell, I attempted to incorporate both phrases to demonstrate how they might apply.
This is an experienced federal judge. He is not a fool. He knows the problem He will fix it if he can. And let me add something which is probably not "politically correct". The judge has already made up his mind. He knows exactly what he is going to rule. Do you really think that he has been spending his time listening to music? It is already decided. Perhaps, there have been sessions in chambers. Perhaps the Judge has already indicated to the parties counsel that he is prepared to deal with this issue. He doesn't want detailed motions and he doesn't want argument. He can do it on his own motion under Rule 60. Mr Sherwood will do what is appropriate. One thing for certain, it will not be on Google's motion !.
The Judge saw the problem right away. Each federal district has their own way of dealing with these things. He knows how to handle such situations when and if they should arise. But all of this is highly speculative. But it does raise another question. How can you not possibly consider the integrity of the juror evidence after more than one month of exposure to news and social pressure. Can Mr. Sherwood take a chance with a juror. Rule 606 procedures are very strict. A juror cannot be asked anything about what went on in the jury room during deliberations. They can't even be asked what was going through their own minds at the time. A court cannot inquire into the mind of the juror. "Decimal transposition" is a quaint phrase. But it is a term of art. If the juror is questioned and he/she says anything other than we misplaced a decimal or if they can't explain the error without going through their calculations while trying to remember what they did more than one month ago, then what does that do to the Plaintiff’s argument of “decimal transposition”?. What then? And anything can happen when the Court is questioning a juror. They are not aware of the law. An innocent answer can spell doom for the plaintiff. How can we possibly sit here and say that we know what is going to happen? Perhaps that is the reason why the Street is not buying the 'obvious miscalculation' story. It is a court case and the safe and smart money says we shall wait until the final decision. Anything can happen. We simply do not know!
I ended the last post with the statement that "I have saved the best for last."
Here, I refer to the Patent Act section 284.
Let me ask a question first. If the court did not change the jury damage awards, could it remedy the problem by increasing the damage amount for Vringo. Does the Judge not have the power to do so?
Did you know that a federal court cannot increase a jury award ,it can only reduce it.. That's right! The impermissibility of additur and the permissibility of remittitur are based on the Supreme Court's determination in the 1935 case of Dimmick and Schiedt. And it continues to be the law of the land. Not so in State courts, but in Federal Courts that is the law. Increasing a jury award violates the 7th amendment - right to trial by jury while decreasing the verdict does not.
Now, consider the Patent Act section 284.
Section 284 Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.
When the damages are not found by a jury, the court shall assess them. In either event the court may increase the damages up to three times the amount found or assessed. Increased damages under this paragraph shall not apply to provisional rights under section 154 (d).
The court may receive expert testimony as an aid to the determination of damages or of what royalty would be reasonable under the circumstances.
The Patent Act overrides the Federal law regarding increasing damages. The question did occur to me, Isn't the Judge required to direct the jury to award the plaintiff, if successful, damages that are adequate to compensate for the infringement but in no event less than a reasonable royalty for the use of invention by the infringer, together with interest and costs as fixed by the court. It is the law!
Needless to say, the section hinges on the word “reasonable”
Everything in this post is intended to encourage thought and discussion. I know that I can be wrong. Heck, that is how I found myself back here.
If you want to follow the patent issue go here case number is below...
http://portal.uspto.gov/external/portal/!ut/p/c5/04_SB8K8xLLM9MSSzPy8xBz9CP0os3hff1NDc1NLYwN3SzcDA08PwyD_YF8zINcYKB-JW97AiCLdBgR0h4Nci992vPIGEHkDHMDRQN_PIz83VT9SP8ocpylGZvqROanpicmV-gW5oREGmQEZgY6KigBnIW_S/dl3/d3/L0lJSklna21DU1EhIS9JRGpBQU15QUJFUkNKRXFnLzRGR2dzbzBWdnphOUlBOW9JQSEhLzdfTU81MTc1OTMwRzlGMDBJSDFST1NNNjMwMjYvRDl0dFA3MzM0MDExNi9zYS5nZXRCaWI!/
90/009,991
Did you talk to Clff? It is very inappropriate for a professor to comment on a US PTO case in my opinion. The case could take up to three years to wind itself through but Ravichers goal is to damage VRNG now, he bragged about this tactic in a Youtube video. He has no scruples. On stocktwits he mentioned you could get a preview of his article tomorrow, he conveniently forgot to mention he wants $40 for the preview. Should this not tell you a lot about him?
Thanks Mandarin I cannot post privately...
Yes he is very much short .....
Yes his articles are coordinated with short groups, they are meaningless really if you read them and ask a patent attorney on their substance, however they are used as a catalyst to short VRNG down, when packs of wolves go looking for food they usually find some one way or another so I expect damage tomorrow, the key is what happens after the raid do strong hands step in or not?
Ravicher is coming out with an article tomorrow according to stock twits looks like a last gasp from a biased short... never heard a professor having time to chat on stock boards and write articles about stocks.. he is extremely biased to say the least
You still have close to 12 million short, you have declining volume and decreasing float plus increasing institutional support according to Cliff so why is the short volume so high, I don't know ask them?
the report is from 11/15 - 11/30 ancient history they probably shorted more in current period
Apparently there are at least 3 precedents under rule FRCP60(a)...
Soverain v. JC Penney, Activevideo v. Verizon, and Robert Tyer Assocs v. Environmental Dynamics,
When the judge corrects this error it's not new ground
I have contacted WSJ will see what they say
Maybe WSJ includes shares in default and official numbers exclude such data , anyway I have not seen this type of discrepancy before. I am looking for another source
conflicting numbers here nasdaq has one number WSJ has a higher number 12.14 million which is just over 1 million shares covered not sure why the discrepancy? There is a 700,000 share difference which is significant
http://quotes.wsj.com/VRNG?mod=DNH_S_cq
http://www.nasdaq.com/symbol/vrng/short-interest
Long Post From Investors Village Read it carefully..
I highlight this as most important IMHO...
When the damages are not found by a jury, the court shall assess them. In either event the court may increase the damages up to three times the amount found or assessed. Increased damages under this paragraph shall not apply to provisional rights under section 154
Final Post 2
I have returned to correct an error. Please be patient and I will try to reward your patience with some further insights into the Vringo case. But first, I must say that these postings were only intended for the good people in the small community of Investor Vlllage who are mostly concerned and interested investors in Vringo. That is why I have posted approximately 20 articles on the case. It is for them. Since leaving, I have been attacked verbally and insulted relentlessly. "Who is that guy? How do we know that he is even a lawyer !!" Honestly, I don't know how Dan Ravicher does it! He must be made of steel. So now I have to make this far more complicated than I ever wanted. I apologize to the Investor Village people.
I ask you to refer to an earlier post - 'Market Uncertainty'. I concluded by asking you to look for a Rule 59 application by Vringo to alter the Judgment. The Clerk Entry Judgment incorporates the "general verdict of the jury with answers to written questions". The form of the Clerk Entry Judgment was approved by the Court. Once approved, in form, it was entered promptly by the Clerk of the Court. The Rule 58 requirement of a separate document (Judges expanded final judgment, findings etc) is not required. This is so that a Rule 59 motion can be brought within 28 days from the time of the Clerk's entry of the judgment ( 'Clerk Entrry Judgment'). The Rule 59 Motion to alter the judgment effectively deals with the important Google damages issue. A Clerk Entry Judgment is not a final judgment. So when the rules refer to the 'entry of a judgment' and you are dealing with a Rule 59 application you disregard the Final Judgment requirement of a separate document (Judge's decision and findings etc.). I realize the importance of being correct about this. That is why I am taking the time to do this. It is my understanding of the rules of court procedure. Let others disagree! Accordingly, Rule 58 deals with (a) the 'form' of the judgment and (b) the time of entry of the judgment. Approval of form and time of entry.
The Clerk is required to enter the judgment promptly unless a separate document (Judge's findings etc.) is required.. The separate document requirement can otherwise delay the time of entry of the Judgment. When the requirement is removed, then the Clerk must have the form of the judgment approved by the judge (court) and the Clerk must promptly enter the judgment..
Now go to PENAKI's posts. PENAKI is a board member who has diiligently posted all of the Pacer docket entries. Go to Pacer Document 801. That is the Clerk Entry Judgment. The time of entry is November 20, 2012.
Under Rule 59 - a motion to amend a Judgment - Vringo has 28 days from the date of entry to file a motion to amend. That date is December 19, 2012. In the previous post I mistakenly said that the date of entry was November 7, 2012. I was in error.
The Clerk Entry Judgment serves the function of a Judgment for Rule 59 purposes. Otherwise, the Plaintiff would have to wait until the final judgment in the form of a separate document is delivered by the court and that could be up to 150 days from the entry of the Final Judgment in the civil docket. But the Clerk Entry Judgment is a judgment in approved form and it has been entered by the Clerk of the Court. Most importantly, it reflects the jury verdict.
In my last post I referred to the Clerk Entry date of the Judgment as November 7, 2012. I made a mistake. The Clerk Entry date was November 20, 2012., I could not let this kind of mistake and the conclusions that I drew from it stand. I had no choice but to return to correct the error.
Rule 58. Entering Judgment
(a) Separate Document. Every judgment and amended judgment must be set out in a separate document, but a separate document is not required for an order disposing of a motion:
(1) for judgment under Rule 50(b);
(2) to amend or make additional findings under Rule 52(b);
(3) for attorney's fees under Rule 54;
(4) for a new trial, or to alter or amend the judgment, under Rule 59; or
(5) for relief under Rule 60.
(b) Entering Judgment.
(1) Without the Court's Direction. Subject to Rule 54(b) and unless the court orders otherwise, the clerk must, without awaiting the court's direction, promptly prepare, sign, and enter the judgment when:
(A) the jury returns a general verdict;
(B) the court awards only costs or a sum certain; or
(C) the court denies all relief.
(2) Court's Approval Required. Subject to Rule 54(b), the court must promptly approve the form of the judgment, which the clerk must promptly enter, when:
(A) the jury returns a special verdict or a general verdict with answers to written questions; or
(B) the court grants other relief not described in this subdivision (b).
(c) Time of Entry. For purposes of these rules, judgment is entered at the following times:
(1) if a separate document is not required, when the judgment is entered in the civil docket under Rule 79(a); or
(2) if a separate document is required, when the judgment is entered in the civil docket under Rule 79(a) and the earlier of these events occurs:
(A) it is set out in a separate document; or
(B) 150 days have run from the entry in the civil docket.
May we move on!
Some have questioned my reference to the need of the judge to correct clear error of law and prevent manifest injustice. I am sorry if you do not like the phrase. It is important to understand how and where they apply. It relates to the Court's duty to exercise sound judgment in the exercise of his discretion re altering the judgment.. It also applies to the exercise of his duties under rule 60. I previously referenced the phrase in the context of the Vringo attorney's strategy not to make any application to amend the judgment. If you will go to the Plaintiff's Reply statement at page 15 and to the Footnote 5 statement that we have been focused on, you will see that the footnote is is a footnote to a particular phrase used by the Plaintiff in his Reply. The phrase is : :"clear error". The point that I was making was that if the Judge chose not to inquire into the issue of the decimal 'transposition', one could argue that a manifest injustice had occurred. But once he decides to look into the matter, Vringo argues that it is 'clear error'. In a nutshel, I attempted to incorporate both phrases to demonstrate how they might apply.
This is an experienced federal judge. He is not a fool. He knows the problem He will fix it if he can. And let me add something which is probably not "politically correct". The judge has already made up his mind. He knows exactly what he is going to rule. Do you really think that he has been spending his time listening to music? So, it doesn't much matter what the Twits and the Yahoos say. It is already decided. Perhaps, there have been meetings in chambers. Perhaps the Judge has already indicated to the parties counsel that he is prepared to deal with this issue. He doesn't want detailed motions and he doesn't want argument. He can do it on his own motion under Rule 60. Mr Sherwood will do what is appropriate. One thing for certain, it will not be on Google's motion !.
And then there is the matter of the five minute recess on November 6th after the jury had been dismissed and the judge was left with counsel in the courtroom. The judge announced that he was taking a five minute recess. But he never returned. Where did he go? I would almost wager that the jury was still assembled and ...... This is a very tricky area of the law. I only put the question out there. The Judge saw the problem right away. He is an experienced federal judge. Each federal district has their own way of dealing with these things. You can bet that he knows how to handle such situations when and ifthey should arise. But all of this is highly speculative and serves no legitimate purpose. But it does raise another question. How can you not possibly consider the integrity of the juror evidence after more than one month of exposure to news and social pressure. They know the stakes here. And they now have had time to read all of the press about trollers and the Google FTC problems. So how can Mr. Sherwood take a chance with a juror. Also, remember that Rule 606 procedures are very strict. A juror cannot be asked anything about what went on in the jury room during deliberations. They can't even be asked what was going through their minds at the time. A court cannot inquire into the mental processes of the juror. "Decimal transposition" is a quaint phrase. But it is a term of art. If the juror is questioned and he/she says that they can't explain the error. What then? Anything can happen when you are questioning a juror. They are not aware of the law. An innocent answer can spell doom for the plaintiff. That is Mr. Sherwood's call. How can we possibly sit here and say that we know what is going to happen? Perhaps that is the reason why the Street is not buying the 'obvious miscalculation' story. It is a court case and the safe money says we shall wiat until the final decision. Anything can happen. We simply do not know!
I ended the last post with the statement that "I have saved the best for last."
Here, I refer to the Patent Act section 284.
Let me ask a question first. If the court did not change the jury damage awards, could it remedy the problem by increasing the damage amount for Vringo. Does the Judge not have the power to do so?
Did you know that a federal court cannot increase a jury award ,it can only reduce it.. That's right! The impermissibility of additur and the permissibility of remittitur are based on the Supreme Court's determination in the 1935 case of Dimmick and Schiedt. And it continues to be the law of the land. Not so in State courts, but in Federal Courts that is the law. Increasing a jury award violates the 7th amendment - right to trial by jury while decreasing the verdct does not.
Now, consider the Patent Act section 284.
Section 284 Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.
When the damages are not found by a jury, the court shall assess them. In either event the court may increase the damages up to three times the amount found or assessed. Increased damages under this paragraph shall not apply to provisional rights under section 154 (d).
The court may receive expert testimony as an aid to the determination of damages or of what royalty would be reasonable under the circumstances.
The Patent Act overrides the Federal law regarding increasing damages. The question did occur to me, Isn't the Judge required to direct the jury to award the plaintiff, if successful, damages that are adequate to compensate for the infringement but in no event less than a reasonable royalty for the use of invention by the infringer, together with interest and costs as fixed by the court. Why can't this be a directed verdict situation. It is the law !!!!!
Everything in this post is intended to encourage thought and discussion. I know that I can be wrong. Heck, that is how I found myself back here.
Read more: http://vringo.freeforums.net/index.cgi?board=general&action=display&thread=894#ixzz2EqOXokE0
Here is the entire filing 814...
Case 2:11-cv-00512-RAJ-TEM Document 814 Filed 12/07/12
Page 1 of 9
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF VIRGINIA
NORFOLK DIVISION
__________________________________________
)
I/P ENGINE, INC., )
)
Plaintiff, )
v. ) Civ. Action No. 2:11-cv-512
)
AOL, INC. et al., )
)
Defendants. )
__________________________________________)
DECLARATION OF STEPHEN L. BECKER, PH.D. IN FURTHER SUPPORT
OF PLAINTIFF I/P ENGINE, INC.’S MOTION FOR AN AWARD OF
PREJUDGMENT INTEREST, POST-JUDGMENT INTEREST AND
DAMAGES FOR DEFENDANTS’ CONTINUING INFRINGEMENT
I, Stephen L. Becker, Ph.D., declare as follows:
1. I submit this declaration in further support of Plaintiff I/P Engine, Inc.’s (“I/P
Engine”) Motion for an Award of Prejudgment, Post-Judgment Interest and Damages, and to
respond to the statements made in the Declaration of Keith R. Ugone submitted in support of
Defendants’ Opposition to I/P Engine’s Motion. I have personal knowledge of the facts set forth
in this Declaration. If called upon to testify, I could and would certify competently to these facts.
2. As I explained in my November 9, 2012 Declaration, the methodology that I used
in deriving my prejudgment-interest calculation was as follows: (a) I determined the average
prime interest rate, as reported by the Federal Reserve, that prevailed during each quarter of the
period since September 15, 2011 to November 6, 2012; (b) I allocated by Defendant the
proportional damages awarded by the jury to the infringing revenues, by quarter, from the third
quarter of 2011 through the third quarter of 2012; (c) I then determined the number of quarters of
interest that would be due on each of those amounts; and (d) using the average prime interest
rate, as reported by the Federal Reserve, and compounded quarterly, I computed the amount of
interest presently due on the royalties associated with each quarter. Using this methodology I
calculated the prejudgment interest due on the damages awarded by the jury from September 15,
2011 to November 6, 2012 to be $643,084. See Exhibit A of my November 9, 2012 Declaration
(Dkt. 794).
3. In his Declaration, Dr. Ugone does not dispute my ultimate calculation. Instead,
he takes issue with what he calls my “’midpoint’ formula” of calculating the interest. (See Ugone
Decl., ¶ 6.) In arriving at my calculation, I assume that the damages were incurred by Google
and the other Defendants ratably over each quarter and, hence, I/P Engine earned those royalties
ratably over each quarter. My method calculates the interest that is due on the infringement as it
occurred. In my experience, this is an accepted and appropriate method for calculating
prejudgment interest. And it is the only calculation that will fully compensate I/P Engine for
Defendants’ infringement.
4. For example, for Google’s infringement from October 1, 2011 through December
31, 2011 (i.e. “Q4 2011”), Dr. Ugone assumes the allocated damages for Google are
$3,805,236.
1
He assumes that interest begins to accrue on those damages on the last day of the
quarter, namely on December 31, 2011. He calculates the interest for that quarter’s allocated
damages as 311 days of interest (i.e. the number of days from December 31, 2011 to November
6, 2012) times a daily interest rate. The result of his calculation (in his Prime Rate scenario) is
1
I note that Dr. Ugone’s allocation of the damages award to various quarters differs slightly, but
not materially, from my allocation method. Dr. Ugone allocates the damages award ratably over
the period from September 15, 2011 through September 30, 2012 based on the number of days in
each quarter. See Ugone Decl., Exhibit 1, footnote (b). In contrast, I allocated the damages
award based on the proportion of the underlying accused revenue of each Defendant in each
quarter. See my November 9, 2012 Declaration, ¶ 4 (Dkt. 794).
Case 2:11-cv-00512-RAJ-TEM Document 814 Filed 12/07/12
Page 2 of 9
$105,374. A consequence of Dr. Ugone’s assumption regarding when interest begins to accrue
is that Google’s infringement that occurred on October 1, 2011, for example, and for which I/P
Engine was awarded damages, accrues no interest until December 31, 2011 and, only after that
date does I/P Engine begin to be credited with interest on those royalties.
5. In contrast, I assume that the royalties for Q4 2011 are earned ratably over each
quarter which has the result of making the midpoint of the quarter the effective date from which
interested is calculated. For example, for the Q4 2011 allocated royalty, I assumed that I/P
Engine is owed four full quarters of interest at a quarterly interest rate of 0.813% (3.25% annual
rate divided by 4). Using my methodology, the interest for Q4 2011 is $123,310. This is a
common and accepted way to estimate the timing of payments that occur ratably over a period,
such as a quarter. Dr. Ugone does not appear to dispute this.
6. The difference between Dr. Ugone’s result of $105,374 and my $123,310 in
interest for Google’s allocated damages for Q4 2011 is almost entirely due to the fact that Dr.
Ugone has calculated only 311 days of interest on the $3,805,236 of principal (# of days from
12/31/2011 through 11/6/2012), while I calculate interest on that amount for a full year (i.e., the
Q4 2011 allocated damages is for royalties that royalty were earned in Q4 2011 and we are now
in Q4 2012, a full four quarters later).
7. Dr. Ugone’s calculation of pre-judgment interest includes interest that is
compounded annually. (See Ugone Decl. ¶ 5.) Dr. Ugone provides no explanation or
justification for the use of annual compounding as opposed to quarterly compounding. His use
of annual compounding is inconsistent with his explicit assumption that the royalties owed to I/P
Engine would have been paid quarterly. (See Ugone Decl. ¶ 5.) In contrast, my approach
Case 2:11-cv-00512-RAJ-TEM Document 814 Filed 12/07/12
Page 3 of 9
includes quarterly compounding, consistent with the assumed timing of the underlying
infringement that was found to have occurred.
8. Dr. Ugone presents two pre-judgment interest scenarios, one based on the 1-Year
T-Bill Rate and another based on the Prime Rate. Using the T-Bill rate, he calculates total
interest of $27,329. Using the Prime Rate he calculates total interest of $499,197. As reflected
in Dr. Ugone’s calculations, the T-Bill rate has been less than 0.2% over the period from
September 15, 2011 through November 6, 2012. (See Ugone Decl. Exhibit 1). Dr. Ugone
provides no opinion or explanation that would justify the use of the T-Bill rate as a basis to
compensate I/P Engine for the time value of the royalties that it did not, in fact, receive at the
time of the Defendants’ infringement.
9. It is my opinion that the T-Bill rate does not provide a reasonable basis upon
which to calculated pre-judgment interest in this case. If the purpose of pre-judgment interest is
to make I/P Engine economically and financially “whole” for the lack of use of the royalties that
it was awarded by the jury, the T-Bill rate would not accomplish that goal. Even the Prime Rate
of 3.25% undercompensates I/P Engine for the true cost of its capital. Vringo’s cost of capital
during the PJI period is approximately 21.1% (see Exhibit 1 attached hereto). Thus, applying the
Prime Rate of 3.25% to the damages award is highly conservative, fair and reasonable. Even
from Google’s perspective, the Prime Rate of 3.25% is far less than its cost of capital which,
during the PJI period, has averaged 9.54%. (see Exhibit 2 attached hereto).
10. In contrast, the T-Bill rate represents the cost of borrowing of the Federal
Government. It is not a reasonable basis upon which to calculate the time value of the royalties
that I/P Engine was awarded by the jury for Google’s and the other Defendants’ infringement.
Case 2:11-cv-00512-RAJ-TEM Document 814 Filed 12/07/12
Page 4 of 9
11. Dr. Ugone also takes issue with the factors that I would use in calculating
supplemental damages. (See Ugone Decl., ¶ 8).
12. The parties do not dispute that the appropriate form of damages is a running
royalty. The parties also do not dispute that the jury awarded a royalty rate of 3.5%. The only
disagreement appears to be over the appropriate apportionment factor to use to arrive at the
royalty base to which the 3.5% royalty rate would apply.
13. In my November 9, 2012 Declaration, I explain that the appropriate
apportionment percentage is 20.9%. This is the flat going-forward apportionment percentage
that I presented at trial (Trial Tr. at 820-21). The 20.9% apportionment factor is applied to
Defendants’ total U.S. revenues from the accused systems, AdWords, AdSense For Search and
AdSense For Mobile Search (derived from the requested accounting) to determine the
apportioned royalty base.
14. According to Dr. Ugone, an apportionment rate of 2.8%, not 20.9%, should be
used for the calculation of Google’s supplemental damages. He arrives at this figure by visually
estimating the height of bars on a demonstrative exhibit presented to the jury (PDX-441) and
comparing those estimated amounts to the $15.8 million that the jury awarded from Google. (See
Ugone Decl. ¶ 8 and Exh. 2.) Several things are obvious from Dr. Ugone’s calculation and his
resulting opinion that the appropriate apportionment percentage should be 2.8%. Dr. Ugone’s
methodology ignores the fact that the jury awarded damages to I/P Engine from AOL, IAC,
Gannett and Target as well as from Google. Dr. Ugone estimates the ratio of the jury award
against Google as a proportion of the estimated $118 million in claimed damages for the period
September 15, 2011 through September 30, 2011. (See Ugone Decl. Exhibit 2) Even assuming
the premise of his calculation was reasonable (which it is not), the calculation is flawed on its
Case 2:11-cv-00512-RAJ-TEM Document 814 Filed 12/07/12
Page 5 of 9
face. The damages figures presented to the jury in graphical form at PDX-083 and again at
PDX-441 were the total damages for all defendants, not just the damages associated with
Google’s infringement. This can be seen by comparing the bar chart at PDX-083, which is
clearly labeled as totaling $493 million in royalties, to PDX-441, the bar chart used by Dr.
Ugone. Both present identical royalty amounts, with the only difference being that in PDX-441
the bars for Q4 2011 through Q3 2012 have been shaded, reflecting the post-laches time period.
That the total amount of these bars, $493 million in royalties, represents all defendants, not just
Google, is evident from the trial transcript and from PDX-055, a summary of the royalty
damages that I presented to the jury during the trial. (Trial Tr. at 767:20-768-8).
15. By using only the $15.8 million awarded against Google and ignoring the
$14,696,155 awarded against the other Defendants, Dr. Ugone is suggesting a meaningless and
unreliable apportionment percentage. This can be demonstrated by applying his 2.8%
apportionment factor to the period covered by the actual award. Total accused revenues
(including the Google co-defendants) for the period from September 15, 2011 through
September 30, 2012 were, based on accounting documents produced by Google (and admitted as
trial exhibits?) were $16,181,666,400. Dr. Ugone’s 2.8% apportionment factor, if applied to
these undisputed amounts of revenue yield total royalties, for all defendants, of $15,858,033, not
the total jury award of $30,496,155.
16. The only relevant apportionment percentage proffered at trial, however, and the
only apportionment percentage ever suggested to the jury was 20.9%. Neither PDX-441 nor any
other exhibit or demonstrative introduced at trial supports a 2.8% apportionment factor. To
arrive at Dr. Ugone’s conclusion, one must ignore all evidence presented at trial, back into an
implied speculative apportionment factor, and ignore the rest of the jury award.
Case 2:11-cv-00512-RAJ-TEM Document 814 Filed 12/07/12
Page 6 of 9
17. The likely reason for Defendants’ convoluted apportionment calculation and
exclusion of the damages awarded from the other defendants is the decimal point transposition
error made by the jury in the verdict form. Based on my review of the verdict form and evidence
submitted in this case, it is clear that the jury, in an apparent effort to adjust the total damages
down to just the post-laches damages period, applied a percentage to the originally pre-laches
damages amount of $493 million.
2
A simple mathematical calculation bears this out. Using the
$493 million, including the Defendant-specific breakdown as the base, the jury awarded 35% of
the damages I/P engine sought for the original damages period for each of AOL, IAC, Gannett,
and Target. (See attached Exhibit 3) For each of these defendants, there can be no question that
the jury applied its 3.5% royalty rate to the only apportionment factor that was presented at trial:
20.9%. The equivalent damages figure against Google, consistent with this approach, should
have been $158,000,000. However, for Google, the jury awarded $15,800,000. This amount is
simply 3.5% of the damages I/P sought for the original damages period—one tenth the amount
awarded for the other defendants. (See attached Exhibit 3) The evidence of the underlying
revenues for each of these defendants was the same. The apportionment percentage that was
presented to the jury was always the same for all defendants, namely 20.9%. The royalty rate
opinion I offered, 3.5%, was always the same for all Defendants. Thus, the portion of the
amount I/P Engine sought for the original damages period should have been the same for each of
the defendants. Because of the exactness of the numbers being 10 times off, the most plausible
explanation is a simple decimal point transposition.
18. Again, the only apportionment percentage (relevant to this issue) with which the
jury was ever presented was 20.9%. In contrast, there was no evidence at all of a 2.8% factor
2
(See PDX-055 for an example of the damages breakdown by Defendant that was presented to
the jury.)
Case 2:11-cv-00512-RAJ-TEM Document 814 Filed 12/07/12
Page 7 of 9
and, in particular, no evidence upon which one could conclude that the intended royalty rate to
be applied to Google was an order of magnitude lower than the other defendants. To arrive at Dr.
Ugone’s conclusion, one must jump through multiple hoops—none of which were ever proffered
at trial.
* * *
I declare under penalty of perjury that the foregoing is true and correct. Signed
December 7, 2012 in Austin, Texas.
__/s/ Stephen L. Becker____________
Stephen L. Becker, Ph.D.
Case 2:11-cv-00512-RAJ-TEM Document 814 Filed 12/07/12
Page 8 of 9
CERTIFICATE OF SERVICE
I hereby certify that on this 7th day of December, 2012, the foregoing DECLARATION
OF STEPHEN L. BECKER, PH.D. IN FURTHER SUPPORT OF PLAINTIFF I/P
ENGINE, INC.’S MOTION FOR AN AWARD OF PREJUDGMENT INTEREST, POSTJUDGMENT INTEREST AND DAMAGES FOR DEFENDANTS’ CONTINUING
INFRINGEMENT, was served via the court’s CM/ECF system, on the following:
Stephen Edward Noona
Kaufman & Canoles, P.C.
150 W Main St
Suite 2100
Norfolk, VA 23510
senoona@kaufcan.com
David Bilsker
David Perlson
Quinn Emanuel Urquhart & Sullivan LLP
50 California Street, 22nd Floor
San Francisco, CA 94111
davidbilsker@quinnemanuel.com
davidperlson@quinnemanuel.com
Robert L. Burns
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
Two Freedom Square
11955 Freedom Drive
Reston, VA 20190
robert.burns@finnegan.com
Cortney S. Alexander
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
3500 SunTrust Plaza
303 Peachtree Street, NE
Atlanta, GA 94111
cortney.alexander@finnegan.com
/s/ Jeffrey K. Sherwood
Case 2:11-cv-00512-RAJ-TEM Document 814 Filed 12/07/12
Page 9 of 9
Exhibit 1
I/P Engine, Inc. v. Google Inc., et al.
Weighted Average Cost Of Capital (WACC) for Vringo, Inc.
Average 3Q12 2Q12 1Q12 4Q11
(a) Risk Free 2.59% 2.42% 2.38% 3.00% 2.57%
(b) Beta 2.21 2.21 2.21 2.21 2.21
(c) Market Premium 6.62% 6.62% 6.62% 6.62% 6.62%
(d) Size Premium 3.89% 3.89% 3.89% 3.89% 3.89%
(e) Cost of Equity 21.11% 20.94% 20.90% 21.52% 21.09%
(f) Equity ($ Millions) 68 194 35 21 22
(g) Debt ($ Millions) 1 0.0 0.2 0.2 3.2
(h) Tax Rate 0.0% 0.0% 0.0% 0.0% 0.0%
(i) Cost of Debt 18.0% 18.0% 18.0% 18.0% 18.0%
(j) Weighted Average Cost of Capital 21.1% 20.9% 20.9% 21.5% 20.7%
Notes:
(g) Debt: Long term debt, short term debt and current portion of long term debt for Vringo, Inc. for the correspondent period;
ThompsonOne.
(h) Tax rate: Expected effective tax rate for Vringo, Inc.; 10K and 10Q filings for the correspondent period.
(i) Cost of debt: Effective interest rate for Loan Modification Agreement as of December 2009 (Vringo 10-K, 2011).
(j) Calculated as (e)*(f)/[(f)+(g)] + [1-(h)]*(i)*(g)/[(f)+(g)]
(a) Risk free rates: Daily Treasury Yield Curve Rates (last day of the period), Resource Center, US Department of the Treasury, at
http://www.treasury.gov/resource-center/....spx?data=yield; accessed on
12/4/2012.
(b) Beta of Vringo, Inc. as of 12/04/2012; YahooFinance.
(c) Market premium rates: Long-horizon expected equity risk premium (historical) - large company stock total returns minus
long-term government bond income returns; Ibbotson SBBI 2012 Valuation Yearbook (Morningstar).
(d) Size premium: Micro-Cap (Market Cap from $1 to $422 Millions); Ibbotson SBBI 2012 Valuation Yearbook (Morningstar).
(f) Equity: Market Cap of Vringo, Inc. - shares outstanding * stock price of last day of period; ThompsonOne.
(e) Calculated as(a)+(b)*(c) + (d)
Case 2:11-cv-00512-RAJ-TEM Document 814-1 Filed 12/07/12
Page 1 of 1
Exhibit 2
I/P Engine, Inc. v. Google Inc., et al.
Weighted Average Cost Of Capital (WACC) for Google, Inc.
Average 3Q12 2Q12 1Q12 4Q11
(a) Risk Free 2.59% 2.42% 2.38% 3.00% 2.57%
(b) Beta 1.08 1.08 1.08 1.08 1.08
(c) Market Premium 6.62% 6.62% 6.62% 6.62% 6.62%
(d) Cost of equity 9.74% 9.57% 9.53% 10.15% 9.72%
(e) Equity ($ Millions) 214,094 247,892 189,650 208,984 209,850
(f) Debt ($ Millions) 5,518 6,206 6,205 5,455 4,204
(g) Tax rate 20.30% 22.30% 19.40% 18.50% 21.00%
(h) Cost of Debt 2.33% 2.33% 2.33% 2.33% 2.33%
(i) Weighted Average Cost of Capital 9.54% 9.38% 9.29% 9.94% 9.56%
Notes:
(i) Calculated as (d)*(e)/[(e)+(f)] + [1-(g)]*(h)*(f)/[(e)+(f)]
(g) Tax rate: Expected effective tax rate for Google Inc; 10K and 10Q filings for the correspondent period.
(h) Cost of debt: calculated based on the interest rates for various long term debt instruments; 10K and 10Q filings for the correspondent
period.
(d) Calculated as (a) + (b)*(c)
(a) Risk free rates: Daily Treasury Yield Curve Rates (last day of period), Resource Center, US Department of the Treasury, at
http://www.treasury.gov/resource-center/....spx?data=yield; accessed on 12/4/2012.
(b) Beta of Google Inc. as of 12/04/2012; ThompsonOne.
(c) Market premium rates: Long-horizon expected equity risk premium (historical) - large company stock total returns minus long-term
government bond income returns; Ibbotson SBBI 2012 Valuation Yearbook (Morningstar).
(e) Equity: Market Cap of Google Inc. - shares outstanding * stock price of last day of period; ThompsonOne.
(f) Debt: Long term debt, short term debt and current portion of long term debt for Google Inc. for the correspondent period; ThompsonOne.
Case 2:11-cv-00512-RAJ-TEM Document 814-2 Filed 12/07/12
Page 1 of 1
EXHIBIT 3
Damages for
Entire Period (a) Jury Award (b)
Jury Award as % of
Total Damages
Presented at Trial (c)
Google $451,190,903 $15,800,000 3.5%
Co-defendant damages
AOL $22,693,517 $7,943,000 35%
IAC $18,917,570 $6,650,000 35%
Target $282,380 $98,833 35%
Gannett $12,348 $4,322 35%
(a) See PDX0055
(b) Dkt. 789; Verdict Form
(c) = /[a]
Read more: http://vringo.freeforums.net/index.cgi?board=general&action=display&thread=893#ixzz2EnQpyoko
Sorry the short position on VRNG is now 12.14 million shares as of 11/30 down from 13.2 million the previous report 11/15....
http://quotes.wsj.com/VRNG
public float is 68.12 million which is consistent with what Cliff told me he said around 70 -75 million so he was a little high
Shares Outstanding
80.33 Million
Public Float
68.12 Million
Shares Sold Short
Short Positions (11/30/2012)
12.14 Million Shares
Change from Last
-8.55%
Percent of Float
17.83%
Some information from Dr. Becker
17. The likely reason for Defendants’ convoluted apportionment calculation and
exclusion of the damages awarded from the other defendants is the decimal point transposition
error made by the jury in the verdict form. Based on my review of the verdict form and evidence
submitted in this case, it is clear that the jury, in an apparent effort to adjust the total damages
down to just the post-laches damages period, applied a percentage to the originally pre-laches
damages amount of $493 million.2 A simple mathematical calculation bears this out. Using the
$493 million, including the Defendant-specific breakdown as the base, the jury awarded 35% of
the damages I/P engine sought for the original damages period for each of AOL, IAC, Gannett,
and Target. (See attached Exhibit 3) For each of these defendants, there can be no question that
the jury applied its 3.5% royalty rate to the only apportionment factor that was presented at trial:
20.9%. The equivalent damages figure against Google, consistent with this approach, should
have been $158,000,000. However, for Google, the jury awarded $15,800,000. This amount is
simply 3.5% of the damages I/P sought for the original damages period—one tenth the amount
awarded for the other defendants. (See attached Exhibit 3) The evidence of the underlying
revenues for each of these defendants was the same. The apportionment percentage that was
presented to the jury was always the same for all defendants, namely 20.9%. The royalty rate
opinion I offered, 3.5%, was always the same for all Defendants. Thus, the portion of the
amount I/P Engine sought for the original damages period should have been the same for each of
the defendants. Because of the exactness of the numbers being 10 times off, the most plausible
explanation is a simple decimal point transposition.
18. Again, the only apportionment percentage (relevant to this issue) with which the
jury was ever presented was 20.9%. In contrast, there was no evidence at all of a 2.8% factor and, in particular, no evidence upon which one could conclude that the intended royalty rate to
be applied to Google was an order of magnitude lower than the other defendants. To arrive at Dr.
Ugone’s conclusion, one must jump through multiple hoops—none of which were ever proffered
at trial.
Read more: http://vringo.freeforums.net/index.cgi?board=general&action=display&thread=892#ixzz2Emnnapbw
Short POsition out...
Shorts covered about 1.78 million shares as of 11/30 11.5 million now ....
Here is one man's opinion from another board. I hope he is right...
Right but that is for the jmol's, which are entirely different than vrng's motion that is pending for supplemental damages plus interest. Unless someone can tell me differently, I believe that JJ can rule on this pending motion at any time now that it has been fully briefed. Again, Google has requested that JJ defer ruling on this motion until after deciding the jmol's (which effectively would mean that none of this will be decided until after the new year). However, if JJ grants vrng's supplemental damges motion (the interest piece is really a non-factor) and applies the 3.5% royalty rate to 20.9% of Google's US revenues, then I see this as a significant catalyst for this stock which should see us once again break the 4.00 barrier if not higher.
Read more: http://vringo.freeforums.net/index.cgi?board=general&action=display&thread=882#ixzz2ElbKH7Jc
Definitely agree. The float is much tighter than most realize and if/when we get a positive rullng from JJ the short exits will not be wide enough, they will be nuked....speaking of shorts, we get the 11/30 numbers tonight....
Thanks for this excellent information!
Yes I was just talking to someone about this and this is pure rumour so take it as is ...
I heard this .. "NOkia is working on a music search engine that utilizes Lang patents. Not in ANY way confirmed"
Well courts don't hold decisions for months. After all the motions are filed we will get the judges decision sooner rather than later. I won't speculate when but if you look at how JJ dealt with the Activision/Verizon ruling he was very decisive and punished Verizon on top of the jury verdict.
Personally I think it is irrelevant to discuss this here because no one here can initiate anything on behalf of the company. I left Cliff's number in one of my posts if anyone has a suggestion for him you should call him.
I think this volume is the fruit of discussions with institutions last week and this....
You realize that not every appeal is granted. There has to be an error in the application of the law for an appeal to be granted. VRNG has more of an appeal basis in terms of how laches was dealt with than Google does IMHO.
I agree with you Mike but I think its too late to have any impact. May I offer a suggestion? Why don't you call Cliff and tell him your proposal. He is very easy to talk to. Let us know what his opinion is on the matter.
646-532-6777
Cliff Weinstein
When I spoke to Cliff yesterday he also mentioned that there are more fillings to come 8 -10 he guessed for both parties so stay tuned to the pacer updates...
Some News From Motley Fool
http://beta.fool.com/smartequity/2012/12/11/vringo-next-catalyst/18328/?ticker=NOK&source=eogyholnk0000001
Vringo: The Next Catalyst
By Mohsin Saeed - December 11, 2012 | Tickers: AOL, AAPL, GOOG, NOK, VRNG | 0 Comments
Mohsin is a member of The Motley Fool Blog Network -- entries represent the personal opinions of our bloggers and are not formally edited.
Recently, Vringo expanded its litigation against Chinese telecommunication giant, ZTE. If the company is successful, according to Reuters, investors should expect $210 million in 7 years. My calculations show that if we calculate the NPV of these payments, it comes down to a per share value of approximately $1.60. The stock is trading at $3.15 and investors can expect half to that to come from the ZTE trial. The Google/AOL final verdict is also on its way and it will also act as a catalyst. Therefore, I believe Vringo has finally turned from a short term bet, to a long term investment.
Vringo
Vringo (NYSEMKT: VRNG) has been a patent success story. The company won its first lawsuit against Google (NASDAQ: GOOG), AOL (NYSE: AOL) & co. last month. According to the jury, Vringo was successful in proving that defendants have engaged in infringement and that the defendants failed to prove by clear and convincing evidence that the asserted claims of the patents are invalid by anticipation. Vringo got exactly what it had hoped for in terms of future royalty but failed to get its $696 million past damages claim. The jury verdict gave the company a mere $30 million in past damages. This $30 million was divided as follows:
Google: $15,800,000
AOL: $7,943,000
IAC: $6,650,000
Gannett : $4,322
Target: $98,833
As the list shows, AOL and Google were penalized the most.
The suit has been discussed extensively and I believe all aspects of the decision are already priced in. Whether the jury made a mistake in calculating past damages, the 3.5% royalty is too high or what will be the revenue base for future damage award; are all questions which cannot be answered until Judge Jackson presents his final ruling. One thing is certain, Vringo has come true on its promises and companies which Vringo sues now, will seriously consider settlement. With the credibility of successfully suing Google in the bag, Vringo can go on to further explore its patent portfolio. The next major target for Vringo is ZTE; the company has already filed multiple lawsuits against ZTE.
ZTE
ZTE (Zhongxing Telecommunication Equipment Corporation) is a Chinese multinational, involved in the manufacturing of telecommunication equipment. The company is currently the world s 5th largest telecommunication equipment manufacturer. The major products of ZTE include, wireless, optical transmission, data telecommunication gear, mobile phones, exchange, etc. The company also acts as an OEM (Original Equipment Manufacturer), manufacturing products for other retail brands. The market is expecting ZTE sales of $15 billion for 2012 and $18.1 billion for 2013.
Vringo vs ZTE
Recently, Vringo announced that it is going global with its IP enforcement efforts by suing ZTE in UK, the company has recently sued ZTE in Manheim, Germany. After its famed victory against Google and AOL, Vringo is in a better position to push companies towards settlement. It is also possible that Vringo can go as far as filing an injunction against ZTE. An injunction if successful will prohibit ZTE for length of the trail, from manufacture or sale of products under infringement consideration.
This can be used as a major tool in pushing companies towards settlement. According to Thompson Reuters, UK courts are much faster and can order an injunction within a short period of six months. This swiftness of justice is the primary reason Vringo is suing ZTE in Germany and UK. This very year, ZTE chose settle a lawsuit against Ericsson, for the mammoth amount of $646 million and an annual royalty worth a significant $194 million.
ZTE is being sued by using patents, which Vringo purchased from Nokia (NYSE: NOK). These patents are related to handsets, base stations, base station controllers, and mobile switching centers. If Vringo is successful, it can collect up to $210 million, according to Reuters. This has been calculated with a royalty rate of 1% and patent expiration period of 7 years, on $3 billion annual sales. This amount doesn't not account for the any past damages, which the court my charge to ZTE.
ZTE will also be well aware that the key Vringo executive behind this litigation is none other than David L. Cohen (Vringo's Head of Litigation, Licensing and Intellectual Property). Mr Cohen was a major force behind Nokia's successful litigation of Apple (NASDAQ: AAPL). In June, Nokia won a major patent victory over Apple, when it was able to prove that the Apple’s iPhone was infringing on Nokia’s patents. The details of this settlement have not been disclosed, but analysts estimate past damages payment to Nokia of around $300-$600 million and a substantial future royalty on iPhone sales.
Mr. Cohen’s experience in patent infringement and in-depth expertise on the patent portfolio acquired from Nokia, make Vringo’s legal team very formidable. I have calculated below, the net payment per share from the successful outcome of this Vringo vs. ZTE trail, according to estimates given by Thompson Reuters:
Expected Payment
$ 30 million for 7 years
RRR
14.80%
NPV
$125.57
No of Shares (million)80
Payment Per Share
$1.57
** No of shares used for Calculation are 80 million. The RRR has been calculated using MRP (6%), RF (1.6%) and beta (2.2).
Conclusion
The next catalyst for Vringo is its case against ZTE. If Vringo wins, investors should expect the company to get payment of $210 million, which comes down to $1.57 per share. It should be noted that there will be a tax deductions. The share is trading at $3.15, which seems to a bargain price, considering Google decision on the way and ZTE cases going to trail. I believe Vringo has transformed from a one off bet, to a long term investment.
Read more: http://vringo.freeforums.net/index.cgi?board=general&action=display&thread=886#ixzz2EksWdYPn
Under God's Power She Flourishes.... I agree with this very much Mike
Ok first let me say I agree with you about the PR firm maybe now is not the time though. I will ask him next time I speak to him. In speaking to him today it sounds like we will get a very knowledgable analyst profiling Vringo, however I don't know when. Cliff thinks the current institutional holdings are much higher than the numbers we see now 8-10 million. They have till Feb 15th to report and he stated that the 4 day 100 million share trades went into their hands. I have been thinking this in watching the trading. There are not many retail traders here, you have long-time longs like me and you and others but take a look at this site as an example. Look at the lack of posts as anecdotal evidence that the mom and pop trader is not here. This is why the mm's keep walking it down the pros put their bids in lower and lower because they are not concerned about the eventual outcome like most people here and stocktwits etc are...
I am sure they know what they are asking for, a substantial amount of money but they are not going to state a number to a shareholder over the phone..
How could he know that. The suits have been filed. It either goes to court or ZTE decides it wants to negotiate with VRNG's lawyers and they arrive at a deal. Considering what Vringo is asking it will be a substantial amount of money.
So tell me what you can talk about that people don't know?
Think about it this way .... you can't manufacture news, that's what penny stocks do before they crash and burn. Of all the things I mentioned none of them warrant a news release.....you can't issue a press release that you might get new analyst coverage, doing a road show, talking to an investment bank, working on ZTE ETC... they are doing all that but none of them warrant a release. He mentioned to me and we know it here. The catalyst to light the match is JJ's ruling and neither he nor anyone can do anything about when he gives it. If you hired a PR firm what you will get is a spike due to new investors. Then the the PR firm sells the shares they got paid. The new investors get impatient when they don't see anything and the stock goes even lower..this is a scenario I have seen with many companies who go the promotional route.
LIke I said they are talking to analysts, Barclays, going to Minneapolis, working on ZTE. He can't tell me when but lots going on. I forgot to mention I asked Cliff about shares/os float institutional ownership etc...
Here is what he told me :
Fully diluted 113 million
81 million common the rest warrants/options
The float he said is 70 - 75 million that is the number of shares "out there" now. We talked a little bit about ownership by institutions and he thinks the number is much higher than that reported publicly. He pointed me to a 4 day trading of over 100 million shares. He said you will see those numbers on Feb 15 when they must report the current quarter.
I just got off the phone with Cliff. They are talking with Barclays bank tomorrow, they will be in Minneapolis later in the week to talk about the company they are in discussions with a new analyst who is very respected in IT world, could be a new write up. The company is working hard behind the scenes. They are not sitting in the office twiddling their thumbs, we talked about the disconnect with stock price. All for now
Look at the declining volume and lack of interest on these boards a being as a positive in the long run. No stock makes big moves with many on board. I have seen this many times before. When the masses return take some of the table....