Vringo Provides Update to Shareholders About Ongoing Patent Litigation
Vringo (NASDAQ: VRNG), a company engaged in the innovation, development and monetization of intellectual property and mobile technologies, today provided an update to its shareholders on its recent and near term events.
"We are taking this opportunity to update our shareholders on progress in three of our wholly-owned subsidiaries' ongoing patent enforcement actions: (i) against Google and others in U.S. District Court for the Eastern District of Virginia and the Court of Appeals for the Federal Circuit; (ii) against ZTE Corporation and its subsidiaries in the United Kingdom, Germany, France, and Australia, and a preliminary inquiry in Spain; and (iii) against ADT and Tyco Integrated Security in U.S. District Court for the Southern District of Florida," said Andrew D. Perlman, Chief Executive Officer of Vringo.
I/P Engine, Inc. v. AOL Inc., Google, Inc. et al.
Eastern District of Virginia
On November 6, 2012, a jury in U.S. District Court in Norfolk, Virginia ruled in favor of Vringo's wholly owned subsidiary I/P Engine, Inc. and against Google and the other defendants with respect to their infringement of the asserted claims of asserted patents. The jury also upheld the validity of the asserted patents, found that past damages are due to I/P Engine, and established a royalty rate.
I/P Engine's case relates to Google's search advertising system, not its organic search system. Therefore, Google's "Hummingbird" update to its organic search system is not related to the product that I/P Engine accused. Vringo does not believe the "Hummingbird" update has any impact on its claims.
As of August 26, 2013, I/P Engine's Notice of Calculation of Supplemental Damages, Pre-judgment Interest and Post-judgment Interest was fully briefed and is ripe for determination by the district court.
The parties are currently litigating before the district court the issue of ongoing royalties and what additional reasonable royalty is owed to I/P Engine for Google and the other defendants' continued infringement. Google has asserted that, as of May 2013, it implemented a "design around" to its system such that it no longer infringes the asserted patents. To resolve the ongoing royalty rate and whether Google's alleged design around is colorably different, the district court set a discovery and briefing schedule.
-- I/P Engine served its expert reports on September 25, 2013.
-- Defendants should serve their expert reports on October 15, 2013.
-- The parties will then submit briefs to the district court on October 30,
2013 and November 10, 2013, respectively.
The district court also wants the parties to attempt to set their own royalty rate before the district court imposes one. To that end, the district court ordered that within five days of completing the aforementioned discovery and briefing schedule, the parties shall meet to negotiate an appropriate ongoing royalty rate, using 20.9% of U.S. AdWords revenues as the appropriate royalty base.
Court of Appeals for the Federal Circuit
I/P Engine and Defendants have appealed various portions of trial to the Court of Appeals for the Federal Circuit.
-- Defendants filed their opening brief on July 22, 2013.
-- I/P Engine filed its response and cross-appeal brief on September 26, 2013.
-- Defendants' response and reply brief is due November 7, 2013.
Vringo expects this appeal to be scheduled for oral argument during the first quarter of 2014.
Vringo Infrastructure, Inc. v. ZTE Corporation
Vringo's wholly owned subsidiaries, Vringo Infrastructure, Inc. and Vringo Germany GmbH, have filed a combined 7 patent infringement actions against ZTE Corporation and its subsidiaries in the United Kingdom, Germany, France, and Australia, and a preliminary inquiry in Spain. The asserted patents relate to wireless infrastructure and handsets.
The hearing on infringement in Germany is scheduled for October 15, 2013. Vringo is seeking injunctive relief, rendering of accounts, and damages.
ZTE describes itself as "a leading global provider of telecommunications equipment and network solutions," with recently reported annual revenue of US $13.7 billion (RMB 86.254 billion), according to filings with the Hong Kong Stock Exchange. According to ZTE's public filings, the company generates its revenue primarily from the sale of telecommunications equipment and handsets.
In a previous hearing, Vringo made public a term sheet it provided to ZTE outlining proposed license terms for standard essential patents. The term sheet is available online at: http://bit.ly/11tQrGZ (on page 5).
Vringo Infrastructure, Inc. v. ADT Corporation and Tyco Integrated Security, LLC
On September 12, 2013, Vringo's wholly owned subsidiary, Vringo Infrastructure, Inc., filed a patent infringement lawsuit against The ADT Corporation, ADT, LLC, ADT Security Services, Inc., and Tyco Integrated Security, LLC in the United States District Court for the Southern District of Florida.
The lawsuit alleges infringement of U.S. Patent No. 6,288,641, entitled "Assembly, and Associated Method, for Remotely Monitoring a Surveillance Area". The asserted patent relates to, amongst other things, the use of a mobile terminal to remotely monitor a location (e.g., home or business).
The court dockets for the cases are publicly available on the Public Access to Court Electronic Records website, http://www.pacer.gov, which is operated by the Administrative Office of the U.S. Courts. The U.S. District Court proceedings are pending in the Eastern District of Virginia, Norfolk Division. Documents regarding United States Patent and Trademark Office proceedings are publicly available on the Patent Application Information Retrieval website, http://portal.uspto.gov/pair/PublicPair.
About Vringo, Inc.
Vringo, Inc. is engaged in the innovation, development and monetization of intellectual property and mobile technologies. Vringo's intellectual property portfolio consists of over 500 patents and patent applications covering telecom infrastructure, internet search, and mobile technologies. The patents and patent applications have been developed internally, and acquired from third parties. Vringo operates a global platform for the distribution of mobile social applications and services. For more information, visit: www.vringoIP.com.
This press release includes forward-looking statements, which may be identified by words such as "believes," "expects," "anticipates," "estimates," "projects," "intends," "should," "seeks," "future," "continue," or the negative of such terms, or other comparable terminology. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from the forward-looking statements contained herein. Factors that could cause actual results to differ materially include, but are not limited to: our inability to license and monetize our patents, including the outcome of the litigation against online search firms and other companies; our inability to monetize and recoup our investment with respect to patent assets that we acquire; our inability to develop and introduce new products and/or develop new intellectual property; new legislation, regulations or court rulings related to enforcing patents, that could harm our business and operating results; unexpected trends in the mobile phone and telecom infrastructure industries; our inability to raise additional capital to fund our combined operations and business plan; our inability to maintain the listing of our securities on NASDAQ; the potential lack of market acceptance of our products; potential competition from other providers and products; our inability to retain key members of our management team; and other risks and uncertainties and other factors discussed from time to time in our filings with the Securities and Exchange Commission ("SEC"), including our annual report on Form 10-K for the year ended December 31, 2012 filed with the SEC on March 21, 2013. Vringo expressly disclaims any obligation to publicly update any forward-looking statements contained herein, whether as a result of new information, future events or otherwise, except as required by law.
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