Over the past week or so, EPE has divulged some of our due diligence on Vringo, Inc. to the investment community. As we would like to get back to posting about biotechnology companies (our core area of expertise), we offer one last Vringo post to our readers with a few interesting tidbits. The remainder of our due diligence will remain private.
Issue 1. Checking Altucher’s District Court numbers
In the techcrunch.com article by Mr. James Altucher that wetted investor interest for Vringo shares, Mr. Altucher stated, “The district the case is getting tried in rules 70% in favor of the plaintiff in patent cases. Most patent trials get settled on the court steps.” As 70% seemed high to us, we decided to fact check these numbers, and further restrict the search to Judge Raymond A. Jackson’s courtroom.
Excluding the current I/P Engine v AOL et al. case, we found that plaintiffs receive favorable rulings on critical motions and outright dispositions 67% of the time in Judge Jackson’s courtroom historically. So yes, the numbers do favor the plaintiff, and Altucher’s numbers check out.
More intriguing is the result of cases filed in the past 3 years. If one looks at the disposition of cases throughout the entire case history, it becomes apparent that most cases resulted in one or more of the defendants settling prior to the final disposition. Combing through recent cases and including partial victories in our estimates, we found that plaintiffs win over 80% of the time in this District.
Issue 2. Strong attorney interest in Vringo
Over the past week, a number of attorneys have contacted EPE disclosing largish positions in VRNG. While this does not say anything definitive about the case in particular, it does suggest which way the legal community thinks the case will go. Indeed, it was our own legal counsel that brought this company to our attention in the first place.
Issue 3. Quantifying the Markman ruling
We quantified the percentage of the terms construed in favor of I/P Engine. Our analysis comes up with a 91% favorable ruling for Vringo, showing the precarious position Google finds itself in if it were to go to trial.
Issue 4. Prior Art
Our consultants have conveyed to us that the Prior Art ruling should favor Vringo. Nothing is set in stone of course, but this appears to be a relatively straightforward ruling. Adding weight to Vringo’s chances, the court will likely favor Vringo on this ruling, in part, out of self-interest. Specifically, a ruling favorable to Google would likely necessitate a revisiting of the Markman ruling, causing a substantial delay. Judge Jackson is known to have a so-called “rocket docket” and likes to keep his cases pointing towards trial. Vringo’s own in-house legal counsel has openly professed their belief that Google will attempt to use delay tactics, and avoid trial.