XpresSpa Group Inc (XSPA)

[ThinkingMan]

New article: Vringo Vs. Google: Investors' Trial FAQ

http://seekingalpha.com/article/957851-vringo-vs-google-investors-trial-faq?source=email_rt_article_title&ifp=0
by SteveKimLaw

Disclosure: I am long VRNG. (More...)

With the Vringo (VRNG) vs. Google (GOOG) trial winding down, there are numerous very significant questions being posed by investors and others who are monitoring the pending outcome. While most Seeking Alpha readers have developed a set of criteria for analyzing a security's purchase to their comfort level, almost all of us don't have a context for analyzing litigation of the type that Vringo and Google are undergoing. In my view, the numerous questions out there are representative of investors' need for hard (and sometimes basic) information about the litigation, so that they can make as informed investment decisions as possible. With this in mind, I have developed a FAQ to address some of these questions. I am also aware that there are other lawyers out there following this stock. By all means, if you disagree with my thoughts, please add your viewpoint to the conversation by commenting. More informed views only add to the investors' database.

Where are we in the trial process?

Vringo has completed its case in chief, and we are in Google's side of the case. When Court recessed on Friday, October 26, Google's damages expert, Dr. Ugone, was on the stand. Vringo will have an opportunity to cross-examine him on Monday morning. It appears that Dr. Ugone will be Google's final witness, and that they will rest their case on Monday. After that, Vringo will call its final witness, Dr. Jaime Carbonell, as a rebuttal witness, on the issue of invalidity.

When will trial end?

My best guess is that the evidence will be closed on Monday. If this plays out, then I would guess that Judge Jackson would schedule closing arguments for Tuesday morning, following which Judge Jackson will instruct the jury as to the law to be applied in this case. Deliberations would then begin as early as Tuesday morning or afternoon. Nobody knows how long the jury will deliberate, but in any event, I would think we will get a verdict before the end of next week.

Does the jury verdict have to be unanimous?

Yes. The jurors need to reach unanimous verdict.

What are the burdens of proof?

There are two different burdens of proof at issue in this case.

1. Preponderance of the Evidence. Vringo bears the burden of proving infringement, and the amount of damages to be awarded, by a preponderance of the evidence. Google and the other Defendants bear the burden of proving their affirmative defenses (such as laches) by a preponderance of the evidence. "Preponderance of the evidence" means that the party who bears the burden of proof must demonstrate to the jury that their version of the facts is more likely than not. Lawyers commonly explain to juries that this is not a high burden, such that even if there is a lot o evidence on both sides, if 51% of the evidence favors the plaintiff, and 49% favors the defendant, then this constitutes a preponderance of the evidence.


2. Clear and Convincing Evidence. Google bears the burden of proving its claim that the patents are invalid by clear and convincing evidence. Clear and convincing evidence is the most stringent burden of proof that is applied in civil cases. To meet the requirement for clear and convincing evidence requirement, the jury must have a "firm belief or conviction" after hearing the evidence, that the patents are invalid.

If Vringo Wins, Can the Judge Award Treble Damages?

I see a lot of "hope" out there that this could still turn into a treble damage case, but I think the handwriting is pretty objectively on the wall on this one. Enhanced damages (which can include treble damages) become available in an infringement where the plaintiff proves that the defendant willful infringed on its patent claims.

Consider that Vringo did not even allege willful infringement or ask for treble damages in its complaint, which should tell you what they really feel about that issue. Moreover, Judge Jackson issued a pretrial order excluding any evidence of willful infringement in this case, based on the fact that Vringo never claimed it.

If Vringo Wins, Can They Get an Injunction Against Google?

Highly unlikely. Here again, Vringo has not asked for injunctive relief in their Complaint. This means that Vringo has not even asserted a claim in this case for an injunction to stop Google from infringing on their patents. There are two reasons for this: (1) As a non-practicing entity, there is very little chance that a Court would grant an injunction to stop Google from using patented technology that Vringo is not using; and (2) Vringo does not want Google to stop using the technology, they would like them to continue using it, but under a license/royalty agreement that would allow Vringo to be paid for such use.

What Can Vringo Recover In This Case?

Vringo has requested an award of past royalties in the sum of $493 million. If the jury finds that Google infringed, it can award a reasonable sum of damages, but not less than a reasonable royalty amount. In addition to past royalties, it would then fall to Judge Jackson to determine and award a reasonable future royalty amount. Vringo can also ask Judge Jackson to award it prejudgment interest on the past sums, as well as all or a portion of its attorney's fees and costs incurred in this enforcement action.

Can the Losing Party File an Appeal?

Yes, the losing party can file an appeal. An appeal must generally be filed within 30 days of the entry of Judge Jackson's entry of judgment. Judgment for the prevailing party will be entered at a later date after the jury verdict is announced.

My guess is that win or lose, the stock will make a brisk move regardless of any party's announcement of an intent to appeal.

I'm Interested, But Late Getting Here. What Can I Read To Catch Up On The Issues In This Case?

James Altucher: "Why Google Might Be Going to $0"
James Altucher: "Google vs. Vringo: Vringo Delivers a Knockout In Round One"
James Altucher: "Vringo: What Has Happened And What I Think Will Happen"
John Ford: "Google Settlement Could Drive Vringo Shares Above $30"
Stevekimlaw: "Vringo vs. Google: Staying Focused Amid The Din"
James Altucher: "What Is Vringo Worth?"
Stevekimlaw: Seeking Alpha Instablog, for daily trial updates