Vringo Scores in Google Patent Trial Over Ad Generating Process

Jan Wolfe

The Litigation Daily

11-08-2012

Vringo Inc. pulled off a trial win in its highly publicized patent infringement case against Google Inc. on Tuesday. And though the verdict may not vindicate all the hype, Vringo's lawyers at Dickstein Shapiro have plenty to celebrate for prevailing over Google's go-to IP litigators at Quinn Emanuel Urquhart & Sullivan.

A federal jury in Norfolk, Va., concluded Tuesday that Google and four co-defendants infringe on Vringo's patents for a process of generating ads based on internet search terms, awarding a combined $30 million in damages for past infringement. More importantly, the jury also found that Google should pay a running royalty to Vringo for future infringement until its patents expire in 2016. According to Vringo's lead counsel, Dickstein's Jeffrey Sherwood, the future royalties could net Vringo between $25-30 million each fiscal quarter. (For what it's worth, one patent law professor following the case pegged Vringo's haul from future royalties at roughly $30 million per year.)

Running royalties and $30 million payday are nothing to sneeze at, but Vringo was seeking a much heftier $696 million in damages on its infringement claims. Google is on the hook for $15.8 million for past infringement. The remaining four co-defendants — AOL Inc., IAC/InterActiveCorp, Target Corporation and Gannett Co Inc. — are responsible for $14.2 million, with AOL and IAC bearing the brunt of the burden.

The case was brought by patent licensing company called I/P Engine Inc. that sued Google in the "rocket docket" of Eastern Virginia in September 2011, alleging infringement of internet advertising patents originally owned by a Lycos Inc. founder. Vringo, a publicly traded company, acquired I/P Engine in March 2012 and took over the case. Vringo debuted as a cellphone ringtone company, but now focuses almost exclusively on patent litigation and licensing.

On March 31, tech guru James Altucher wrote a piece for TechCrunch about how Vringo's IP could prompt big losses for Google. Two weeks later, billionaire investor Mark Cuban snatched up a 7 percent stake in the company, setting off an investing frenzy. In the months leading up to trial, Vringo's stock price quadrupled.

The trial kicked off on Oct. 4, with Dickstein Shapiro squaring off against Google trial counsel David Nelson of Quinn Emanuel's Chicago office.

Vringo's investors eagerly followed the litigation, and the company's stock price fluctuated with every development. On Oct. 31, the judge overseeing the case, Raymond Jackson, dramatically slashed Vringo's potential damages for past infringement, sending the company's stock down 36 percent. Jackson ruled that Google had been prejudiced by Vringo's delay in bringing suit, and therefore Vringo couldn't collect damages for past infringement from 2005 through September 2011. Shares shot back up on Monday, when jurors asked questions that seemed to suggest that Vringo's patents were both valid and infringed.

Sherwood, who handled Vringo's opening and closing arguments, told us after the verdict came down that he's "very happy," but also "frustrated" by Judge Jackson's ruling on damages. "I think the jury wanted to award more." Sherwood said.

Sherwood's co-counsel at Dickstein Shapiro were Kenneth Brothers and Frank Cimino Jr. The company's local counsel was Donald Stout of Arlington, Virginia-based Antonelli, Terry, Stout & Kraus.

In addition to Nelson, Google was represented by Quinn Emanuel partners David Bilsker and David Perlson.