Why Vringo Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Vringo (NASDAQ: VRNG  )  jumped more than 10% during intraday trading Wednesday after the company announced the U.S. Patent and Trademark Office had validated all the claims of its "664 patent," which had been specifically challenged by Google.

So what: Specifically, Vringo states, yesterday the USPTO "mailed a notice that it will issue a certificate confirming that all of the claims of U.S. Patent No. 7,775,664 challenged by Google remain valid and unchanged." For those of you keeping track, this is the second of two patents -- the first of which was validated in a similar decision in July -- which had been the subject of a contentious, long-standing legal battle between Vringo and the likes of AOL, Google, IAC/Interactive, Gannett, and Target. Now that both patents have been validated, it paves the way for Vringo to collect royalties.

Now what: Even so, Google has asserted that, as of May 2013, it implemented a "design around" to its system so that it no longer infringes the patents. For now, the court briefing process is still under way to both resolve the ongoing royalty rate and determine whether Google's new design is sufficient to avoid having to pay future royalties to Vringo.

As it stands, though, there's no disputing today's win is a big one for Vringo investors.

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  • Report this Comment On November 07, 2013, at 4:43 AM, hashhampton wrote:

    Yeah, GOOG has a work around, bull. If they had a true workaround then they would have implemented it. The reality is that they cannot work around VRNG's patent that collects data, i.e. Adwords. It's a methodology and anything they do is just colorably different, not different enough to be labeled a true "work around." VRNG has now won in court and won twice with the USPTO. $40,000. a pop to challenge VRNG's patents, which for GOOG is chump change I know, but after a year of litigation it's time for the judge to bring the hammer down on GOOG. They don't have a "leg" to stand on.

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