Vringo & ZTE Square Off in SDNY, China’s Pressure Tactics “Exposed”
July 23, 2015 (Mimesis Law) — Vringo (VRNG) investors have been a beaten bunch since the devastating invalidation of Vringo’s trial-winning patents from the company’s long running saga with Google. While the fate of that case hangs by the slender reed of a potential Supreme Court review of that invalidation decision, the action has been heating up with respect to Vringo’s other headline patent efforts — its attempts to assert Nokia-sourced patents against Chinese electronics giant ZTE.
Vringo’s game plan against ZTE is a simple one. Attack ZTE using the Nokia patents in patent courts worldwide, with the hope of shutting down ZTE’s access to those markets one-by-one. In parallel, Vringo has been attempting to convince ZTE to accept a portfolio license to the Nokia portfolio on FRAND standard-essential patent licensing terms. But Vringo and ZTE has very different ideas about what a fair price for a license to the Nokia portfolio is. Vringo needs a major settlement for this effort to pay off, along the order of $50M+ at minimum. ZTE is resisting strongly.
While most of the action between Vringo and ZTE has taken place overseas, there is an interesting case filed by Vringo in the Southern District of New York, arising out of alleged NDA breaches by ZTE. In a blockbuster amended complaint filed recently, along with a motion to compel testimony from ZTE’s general counsel, Vringo has upped the ante against ZTE by alleging that ZTE has colluded with Chinese government “anti-monopoly” authorities to try and pressure Vringo to lower its licensing demands. Additionally, Vringo has alleged that ZTE has engaged in stock manipulation by shorting Vringo’s already depressed stock, and by waging a public campaign to smear Vringo.
Vringo has made some serious allegations, and it will be interesting to see ZTE’s upcoming response. Unfortunately for investors, the lengths that ZTE has allegedly gone to avoid paying off Vringo to date suggests that the days of easy licensing money for patent holders like Vringo — even when trying to license “pedigreed” patents — are long over. It remains to be seen whether Vringo’s payday will ever come, and whether this latest round of filings helps pressure ZTE to come to the licensing table with a more friendly disposition.
The Week(s) Ahead — Expected Events
- Parkervision and Marvell CAFC decisions – TBD
Hopefully you have had a chance to catch our “Markman Minute” videos (available at www.mimesislaw.com/intellectual-property) for a deeper look at some of the biggest current patent stories of interest to investors. Finally, we want your feedback and suggestions, so feel free to send it along to email@example.com or to @markmanadvisors on Twitter. You can also visit our website at www.markmanadvisors.com. Questions from the readership are always welcome as well; we will try to get you answers in future issues of the Markman Note.
Disclosures and Disclaimers:
Nothing in this material is intended to constitute legal or investment advice of any kind, nor is any of this material based on any non-public information of any kind. In addition to my work at Markman Advisors, I am also a name partner at a NYC-based intellectual property litigation boutique firm, Kroub Silbersher & Kolmykov PLLC (www.kskiplaw.com). Markman Advisors is affiliated with a Houston-based investment management firm, Perdix Capital Management, which may have existing or potential positions relating to situations discussed in this material. Markman Advisors also provides consulting services to buy-side investors, including hedge funds and family offices, that may also have or enter into positions relating to situations discussed in this material.
Main image via Wikimedia Commons.