Vringo (VRNG) Affirms Google (GOOG) Ruling, Royalty Rate Set at 6.5%

January 29, 2014 8:57 AM EST Send to a Friend
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Vringo, Inc. (NASDAQ: VRNG) announced that on January 28, 2014, the U.S. District Court for the Eastern District of Virginia, Norfolk Division, issued a Memorandum Opinion and Order related to its wholly-owned subsidiary I/P Engine, Inc.`s litigation against AOL, Google et al. for infringement of its patents through their AdWords system.

In the Order, the Court held that the appropriate ongoing royalty rate for defendants` continued infringement of the patents-in-suit that "would reasonably compensate [I/P Engine] for giving up [its] right to exclude yet allow an ongoing willful infringer to make a reasonable profit" is a rate of 6.5% of the 20.9% royalty base previously set by the District Court.

"We are pleased with the District Court`s ruling. We are committed to vigorously defending our intellectual property rights to redress Google and its customers` continuing and willful unlicensed use of the technology invented by Ken Lang, our President and Chief Technology Officer," said Andrew D. Perlman, Chief Executive Officer of Vringo.

Background

On November 6, 2012, a jury in U.S. District Court in Norfolk, Virginia ruled in favor of I/P Engine and against the defendants AOL Inc., Google, Inc., IAC Search & Media, Inc., Target Corp., and Gannett Co., Inc. with respect to defendants` infringement of the asserted claims of U.S. Patent Nos. 6,314,420 and 6,775,664. After upholding the validity of the patents-in-suit, and determining that the asserted claims of the patents were infringed by the defendants, the jury found that reasonable royalty damages should be based on a "running royalty," and that the running royalty rate should be 3.5%. The jury also awarded I/P Engine a total of approximately $30.5 million. On November 20, 2012, the clerk entered the District Court`s final judgment. On January 3, 2014, the District Court ordered that I/P Engine recover an additional sum of $17.32 million from Defendants for supplemental damages and prejudgment interest. The District Court deferred ruling on post-judgment interest pending the parties` submission of their calculations of post-judgment interest, incorporating the supplemental damages and prejudgment interest awarded in the January 3, 2014 order, until Defendants have satisfied the judgment.

I/P Engine and Defendants have appealed the case to the Court of Appeals for the Federal Circuit. The District Court proceedings are pending in the Eastern District of Virginia, Norfolk Division. The Appellate proceedings are pending in the United States Court of Appeals for the Federal Circuit. The court dockets for the foregoing cases are publicly available on the Public Access to Court Electronic Records website, www.pacer.gov, which is operated by the Administrative Office of the U.S. Courts.

The United States Patent and Trademark Office is currently considering one request from Google for reexamination of certain claims of one of the asserted patents. The USPTO has previously upheld the validity of both of the asserted patents. Documents regarding USPTO proceedings are publicly available on the Patent Application Information Retrieval website, http://portal.uspto.gov/pair/PublicPair.


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