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Speculating here, but if I were the judge, and if I were representing VRNG I would argue, that the infringing royalty rate should be implemented and let GOOG move for a modification, or file a new action to reduce the damages, in the event they actually institute a work around.
Yes. If the goal was to limit damages, implement the work around as soon as possible. If the goal is delay, allege discovery on the new method is necessary. They know darn well, in my opinion, this alleged work around also infringes...
Agree and two quick points - we have not had a response fron VRNG yet, and the key is they "will be" allegedly implementing this work around. If it were truly viable, it would be implemented already, I believe.
Agree - same strategy used by AAPL against VHC. AAPL said they have a work around. Where is it???
If there was an adequate work around, it would have been implemented long ago. And patented by GOOG.
If only someone had warned us of this filing! :)
Two random quick thoughts. I think the next Pacer docs we will see is a renewed request by GOOG to depose Vringo's expert, along with a request for expedited briefing. I think that probably gets denied. I also personally believe it likely Vringo appealled so quickly to assume appellant status, to get first and last briefing to the appeals court.
I definitely agree with the first part of this. In my opinion, and it is only an opinion but based on my review of the evidence and what my experience tells is likely to happen, the chances the judge goes for GOOG's argument is very small. The argument screams to me of an attempt to make an argument out of whole cloth. Lawyers can sometimes convince themselves of any argument as long as it has any basis reasonable or not, because they are advicates for their clients, have to argue something and they personally want to win out of a sense if ego. However, these arguments which lawyers may even get themselves to believe rarely ever win, as any good judge ( and I definitely put JJ in that category) can see through such flimsy arguments as essentially baseless. I believe that is the case here, and the judge will give this argument short shrift. I still would love to see GOOG's brief, but if this is it, I say all the better for Vringo.
As for the second part, I am not sure anything will make GOOG want to settle, so I am not comfortable thinking this or that development will make settlement more or less likely. I truly hope I am wrong.
Most good people haven't. :)
"I used to clerk for a federal judge."
Me too! :)
Even though these rulings were expected, it's good to finally get them decided. Now the real fun begins. As I think many believe, I concur the royalty rate will determine how high the stock will go in the near term (absent an intervening settlement from MSFT, which I personally would not bank on happening before the royalty rate is set, in any event.) I cant wait to read GOOG"s reply (and which legal team shows up - the amateurish ones before the last briefs, or the professionals that filed the last briefs. I think the latter.)
Thanks for the update. I was only responding to what you wrote in your post, which did not indicate a hedge position. I agree a collar is a hedge.
By the way, I assume they did this to get as long as they wanted without moving the price of the underlying shares too much.
I am sorry but the facts you outline, which I have not independently investigated, are not a hedge strategy. Owning stock is a long position. Buying calls is a long position. Selling puts is a long position. Lomg plus long plus long equals no hedge and a large long bet. The stock and call positions are easy to understand. Selling puts maybe more difficult but it simply means you are selling the right to be required to buy more stock at a set price. For the position to work, the price has to wind up HIGHER than the strike price, thus it is a long position. It is of course possible to hedge a long by selling calls or buying puts, but thats not what is going on in what you posted. Thanks for the post, though, it s very interesting they did this.
For what its worth, I agree with your assessment Red. At one point I was hopeful of a settlement, and it is of course still possible, but I no longer consider it a likely event. GOOG did not even acknowledge the jury verdict in favor of Vringo in the latest 10k (consolidated notes to the financial statement note 11) disclosure, which is just one more (admittedly tiny) clue they dont presently intend or feel the need to settle.
Yes.
Yes, a judge's actions must be spported by evidence and law, true. However, there is nothing inconsistent with evidence or law to allow a new jury to determine the entire damages issue based upon evidence and law presented to them. In other words, the judge may rule he does not want to limit the new jury in what they can award, only that the liability issue has already been determined. And, to be clear, the judge COULD enter an order for a whole new trial, liability AND damages, this is what Google requests in the alternative to a judgment in their favor notwithstanding the jury's verdict, but I think the chance of that is remote.
That's not true. The judge can do whatever he wants. Vringo is asking the Court to slice and dice a jury verdict based on a jury form. BY FAR the most logical and most often allowed slice (or bifurcation in legalese) is separating the issue of liability from the issue of damages, and that is damages as a whole. It is possible the judge just orders a new trial in damages only, no one has to request it. I don't believe it is likely, but it iS a risk. Vringo is asking for a further slice of the verdict to just the calculation of past damages. There is support for this in the record and it does make sense, but that does not mean that is what the judge will do, and it would be unremarkable from a legal point of view to see a new trial on the damages issue as a whole.
Google did no such thing. They only admitted that there were sufficient facts publically available for Lycos to determine if they wanted to CLAIM infringement. The law always allows these "constructive notice" types of claims, and no actual liability is admitted. In other words, they are saying, we don't think we are infringing, but you have sufficient information to claim infringement if you think we are. Don't get me wrong, I am long and think Google's response is weak, but ths claim of admitting infringement is just plain wrong. For what its worth, I think Google's motion for judgment has no realistic chance to win. I worry a bit about a full new trial from the jury's error, but not a lot. My biggest concern is that the royalty rate is thrown out with the new mini trial on damages and Vringo will have to get the new jury to again agree to a running royalty and a rate. Even so, I dont think this is the most likely outcome (which is all post trial motions are denied), but there is a risk. The second most likely outcome is Vringo gets the limited trial on post damages they request. I think thats about 1 in 3. Finally, I dont believe the laches motion by Vringo has much of a chance of winning with this judge. On appeal, the chances would be better.
It is unlikely in the extreme. GOOG's motion for judgment not withstanding the jury verdict (or for a new trial) is based on alleged failure to introduce sufficient evidence to support damages. This argument has been already rejected by the court twice, once pretrial, and once after the plaintiff rested. Moreover, it would require the judge to fnd that he himself had erred numerous times in what evidence he allowed at trial. As I say, the chance of this is virtually zero.
Moreover, I will add it now looks like the Court will only have one decision after all the motions are fully briefed, with no extension for the Royalties motion Google seeks to delay. This is because the judge failed to act on Googles latest motion to shorten briefing time for its motion to depose Dr. Becker. That motion now appears to be moot, and a regular briefing schedule takes us beyond January 25, the date responses are due to the pending VRNG motions. It's not 100% sure, but it looks very very good. This would square with the judge's comments that he thought the parties were coming to him with too many filings. I think we get a final decison by March 1, but once everything is briefed by Feb 15, its all up to the judge's schedule.
For what its worth, I think we are under attack from the shorts. I think they have been in damage control mode since the jury verdict, which surprised them (or there wouldn't have been so many of them pre-verdict.) I think they know they have a window here to drive the price down and have a lower base for the eventual lift off on news of JJs decision. A lower base means a lower top I think they believe. Im not sure thats true. In any event, this is hell, but you know what they say, when you're going through hell, keep going! This too shall pass. In the interim, I only watch the share price a little and even that is too much! Nothing has changed fundamentally. The share price in March will be much higher, I believe, in the interim, I have other i terests to sustain me. Of course I will continue to check in on the good folks here!
One last point. The current market cap s $225 million. Cash on hand is $60 million. Therefore, on a valuation basis, the stock has already priced in the absolute worst case scenario in the Google litigation, with no value assigned to the Nokia patents, which an outside firm valued at $172 million. At the current price, there is virtually no fundamental valuation risk. That does not mean the stock price can't go lower in the interim, but eventually the stock price will reflect true value.
I agree xlt, and the thesis also ignores the trajectory of revenues, which, even in the unlikely event the Court does not augment the jury past award rate to the forward rate (and again, this is HIGHLY unlikely, as case law makes clear, and would be contrary to the ONLY evidentiary award rate which is 10 times higher), GOOG's infringing revenues are leaping year over year, such that even this low probability lowest case scenario, the award would still approach $200 million.
Yes, better research. Vrng won the trial, and the briefs by the attorneys on the post trial motions looks like Harvard Law Review, citing to controlling precedent with references to the evidentiary record, versus Cayahoga County Community College debate club, arguing arguments without precedent or basis they have lost before the same judge twice before. Good luck with that theory. Shorts are trying to paint a picture of an alternate reality where Goog has a chance of a favorable outcome, where in reality the chances are unlikely in the extreme.
More than a million new shorts in new report, and VRNG the #1 in increased short position, #10 in total short position. Thats how they are keeping VRNG down!
Quinn Emanuel Loses Big Trial Again in Marvell Loss Against Carnegie Mellon. More than a billion. That makes four in a row - Mattel v. MGA; Apple v. Samsung; and Vringo v. Goog.
Applause to the admins for keeping this board clean (well, mostly!). No personal attacks here please!
That is because Vringo won the trial and is correct on the law and facts in their motions. Stock prices are emotional as well as fundamental. Shorts are controlling this stock, as is disappointed and now fearful longs out to make a quick killing. I dont expect a permanent price rise until after the settlement. I would add I am least confident about timing, which is why I own stock, not options. I am not concerned about the price today. I am concerned about the price in a year.
The parties agreed to all post trial motions extensions to end of January/ mid February. This means nothing and is professional courtesy. Goog filed a further motion to extend even further the briefing on the Royalty motion until after the other motions are decided. This means they want to settle, have little faith in their own motions, and are afraid the judge will grant the 7% royalty and they will have no negotiating leverage. The motion being decided with briefing ending January 3 is the motion by Goog to put off the Royalty motion until after the decision on all other post trial motions. I believe Google's fears are justified. I also believe the judge will deny the request to extend briefing on the Royalty motion, and the case will settle by the time Goog reports earnings. Having lost the trial, my understanding of accounting rules require that Goog estimate the judgment and reserve for it, which would then be a floor from which Vringo would negotiate, and they would not want to do that. My expectation on the motions are all will be denied, the jury verdict upheld, and a 5 or 7% royalty awarded, except that a settlement of north of $500 million will be reached first, so we will never learn of the decision. I am trading this stock accordingly.