Google Is Ordered to Pay Higher Royalty Rate to Vringo in Patent Dispute "Vringo Shares Surge as Judge's Ruling Could Be Worth $1 Billion to the Small Tech Firm"
By BEN FOX RUBIN
Updated Jan. 29, 2014 1:00 p.m. ET
Vringo Inc., VRNG +20.65% a small patent and technology company, gained a significant victory in its ongoing patent battle with Google Inc. GOOG -1.43% and other companies after a Virginia district judge Tuesday raised the future royalty rate Vringo stands to receive.
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The new royalty rate, in addition to past awards, are worth about $1 billion for Vringo, according to a person familiar with the matter. Analysts previously had projected future royalties from the suit to be worth several hundred million dollars.
The case, however, faces an ongoing appeals process, which could reduce the size of the estimated awards.
Nonetheless, Vringo shares, which sometimes move sharply in response to the patent suit's rulings, surged in midday trading, putting its market value at $434 million. The company's all-time closing high, reached in October 2012, was $5.43.
Vringo had sued Google, AOL Inc., AOL -4.71% IAC/InterActiveCorp. IACI -3.05% , Gannett Co. GCI -1.69% and Target Corp. TGT -1.73% , alleging infringement of two of its patents used to select and position advertising on Internet-search results. It won the case in November 2012, and it has been moving through post-trial litigation since then.
Google is considered the primary defendant in the suit.
The judge in the case last week determined that a new system designed by Google last year continued to infringe the patents. Following that decision, the judge on Tuesday raised a running royalty rate granted to Vringo to 6.5% from 3.5% because the defendents were deemed to be willfully infringing Vringo's patents.
"We believe strongly in our pending appeal in this matter, and we anticipate seeking Federal Circuit review of today's decision as well," Google patent counsel Jennifer Polse said.
Write to Ben Fox Rubin at ben.rubin@wsj.com
