Vringo vs. Microsoft: Another Courtroom Victory?

It was only a matter of time before Vringo's (NASDAQ: VRNG  ) subsidiary, I/P Engine, would go after Microsoft (NASDAQ: MSFT  ) . Vringo brought a lawsuit against Google and others last year for patent infringements on its search engine advertising system -- and won. Now it's taking the same fight to Microsoft and investors are hoping to benefit from another courtroom victory.

When at first you succeed, try try again
I/P Engine successfully won its suit against Google, AOL and others this past November and received about $30 million in damages and will receive running royalties of about 3.5% until 2016. The lawsuit focused on a handful of patents owned by Vringo, created by its now Chief Technology Officer Ken Lang. Since Vringo's patents were upheld in that suit, the company can pursue Microsoft and other companies using the same patent infringement claims.

The new lawsuit focuses on two specific patents, which were filed in 2001, that explain an online search advertising system that is used by many tech companies. According to the official complaint, I/P Engine alleges that Microsoft's Bing Ads system infringes on the two patents and I/P is entitled to damages.

What to expect when you're suing
I/P Engine didn't state specifically in the suit how much it's asking for from Microsoft, so it could be a while before investors know how much Vringo could make if it wins the suit. But whatever the final number turns out to be, investors would be smart to remember that Vringo only received a fraction of what it was seeking in its November lawsuit.

Vringo's stock is completely dependent on lawsuits like this, considering the company is hardly focusing on any other products or services. Investors should expect Vringo's stock to remain volatile depending on news of the suit and the final verdict. Vringo was up 200% in 2012, and is up about 8% since the beginning of January.

Whether the company wins or loses against Microsoft, don't expect this to be the last of Vringo's lawsuits against tech companies. Vringo spent $22 million to buy patents from Nokia back in August, and given its win against Google in November, the company is likely to use those patents to go after companies like Yahoo! as well.

Trolling for returns
Many consider Vringo to be a patent troll, and whether it's true or not, some investors pocketed significant returns with the company last year. I've said before that I'd be wary to invest in Vringo because of its volatility and the fact that its entire business is built on jury verdicts, but billionaire Mark Cuban disagrees; he's the company's largest shareholder with a 7.4% stake. Investors should consider the fact that buying stock in Vringo is an investment in jury decisions and ongoing litigation instead of products and services. If that matches up with your investment thesis, then there may be large gains in your future.

Then again, if investments based on courtroom litigation aren't your thing, then maybe you should consider other areas of technology that don't involve lawyers. Digital data storage is increasing by 60% annually, and to make sense of this trend and pick out a stock winner, The Motley Fool has compiled a new report called "The Only Stock You Need to Profit From the NEW Technology Revolution." The report highlights a company that has gained 300% since first recommended by Fool analysts but still has plenty of room left to run. Thousands have requested access to this special free report, and now you can access it today at no cost. To get instant access to the name of this company transforming the IT industry, click here -- it's free.


Read/Post Comments (3) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 06, 2013, at 6:53 PM, hashhampton wrote:

    Chris, VRNG hasn't recieved anything yet, and the decimal misplacement awarding them 30 million is being disputed. There's a ton of stuff/motions to prove that it ain't over yet and VRNG won the jury trial. They won, they beat Goog, and Goog is just stalling. Won't surprise me if Microsoft doesn't buy VRNG and then turn up the heat on Goog. My won't that be a fine day!

  • Report this Comment On February 07, 2013, at 11:45 AM, JoshWallStreet wrote:

    Aftr the company (VRNG ) raised money TWICE, Cuban no longer holds 7.4% Get your facts straight before addressing the investing community, please. Also, you stress how patent litigation is their only game, when it is not. They also do mobile apps. They have over a million downloads as of feb of last year, as well as an agreement with FaceBook. Just saying, you are propogating lies. Why would you be so weary to buy a stock with a market cap of 255 million that has ~half of a billion dollars comioing to them from Google, and other very promising irons in the fire??? I think this will be the next VHC...you just watch, mister uninformed.

  • Report this Comment On February 07, 2013, at 7:22 PM, JoshWallStreet wrote:

    The author is more of a troll than VRNG LOL...the word troll means nothing, who cares what people call you when you are making money. Now lying about the situation in an article, THAT'S Trolling!!!!

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2239990, ~/Articles/ArticleHandler.aspx, 8/21/2014 11:15:48 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 hour ago Sponsored by:
DOW 17,039.49 60.36 0.36%
S&P 500 1,992.37 5.86 0.29%
NASD 4,532.10 5.62 0.12%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/21/2014 4:04 PM
AOL $43.65 Down -0.11 -0.25%
AOL CAPS Rating: *
GOOGL $592.42 Down -2.99 -0.50%
Google (A shares) CAPS Rating: ****
MSFT $45.22 Up +0.27 +0.60%
Microsoft CAPS Rating: ***
NOK $8.25 Up +0.12 +1.48%
Nokia CAPS Rating: **
VRNG $1.21 Up +0.05 +4.31%
Vringo, Inc. CAPS Rating: **
YHOO $37.64 Up +0.14 +0.37%
Yahoo CAPS Rating: ***

Advertisement