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Why Vringo, Inc. Shares Popped

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 nearly 22% Wednesday after the company announced a favorable court ruling regarding outstanding patent litigation for its I/P Engine subsidiary.

So what: Specifically, Vringo states, a U.S. District Court has ruled the "Defendants' alleged design-around is 'nothing more than a colorable variation of the system adjudged to infringe,' and accordingly I/P Engine 'is entitled to ongoing royalties as long as Defendants continue to use the modified system.'"

So what does this mean? Remember, shares of Vringo also jumped back in November, when the U.S. Patent and Trademark Office validated all the claims of the second of two patents being challenged by various companies including AOL, Google, IAC/Interactive, Gannett, and Target. That ruling, for its part, paved the way for Vringo to collect royalties from the infringing companies. 

Google and AOL, however, were still arguing they had designed workarounds specifically to avoid infringing Vringo's patents, and therefore shouldn't owe the company royalties. Today's ruling effectively negates those claims. 

Now what: AOL hasn't responded for comment, but a Google representative quickly weighed in, "Today's decision further highlights the mischief trolls can make with the patent system." As a result, Google elaborated, it not only looks forward to the results of its pending appeal of the original ruling, but also plans to seek a review of today's decision.

If one thing's for sure, though, it's that today's win is a big one for Vringo shareholders, who are undoubtedly looking forward to resolving the case once and for all.

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

Comments from our Foolish Readers

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  • Report this Comment On January 22, 2014, at 7:44 PM, hashhampton wrote:

    Come on Steve, give it up. If JJ rules tomorrow GOOG is going to be paying up big time. You've got to stop bowing down to GOOG the thief.

    VRNG has the patents, call them a troll, but they've got the patents. Too bad GOOG didn't pay Congress more, maybe they would have passed more stringent patent laws that favored companies who steal patents like GOOG, but alas, GOOG got sued, lost, lost again, and lost once again. Time to pay up Steve and they will. VRNG could hit $20.00

  • Report this Comment On January 22, 2014, at 7:50 PM, hashhampton wrote:

    Hey Steve, what other patent stocks are you talking about? What's better than VRNG? WDDD?

  • Report this Comment On January 22, 2014, at 8:13 PM, Patentplays wrote:

    @ Steve

    Yes the USPTO ruling in November helped but it was the January 3, 2013 Memorandum and Order from Judge Jackson who affirmed the 20.9% revenue base and the 3.5% Royalty. Todays action only re-affirms that Google continues to merit the legal standards and requirements for Willful Infringement. Those that have followed this case know that the next ruling is a motion for increased royalties, possibly 7%, and are buying the stock in anticipation that the Judge will rule accordingly. I opined in detail and I welcome your comments.

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Steve Symington

Technology and consumer goods specialist for the Fool. Steve looks for responsible businesses which positively shape our lives. Then, he invests accordingly. Enjoy his work? Connect with him on Twitter & Facebook so you don't miss a thing.

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9/4/2015 3:59 PM
VRNG $0.59 Up +0.00 +0.72%
Vringo, Inc. CAPS Rating: **