Is Google et al. readying a Summary Judgement? A look at the BID v. AOL case

A number of authors have recently stated that I/P Engine/Vringo stands an excellent chance against Google et al. in their patent infringement case because Plaintiffs win roughly 70% of the time in the Eastern District of Virginia Circuit. We found it surprising that this number of “70%” has been tossed around without much verification, and with rarely a mention of Google’s previous patent litigation success. A detailed look at Google’s legal team leader, a Mr. David A. Perlson, and his colleagues in this case, Ms. Emily O’Brien and Mr. Stephen Noona, is a must for Vringo investors, as it may portray the future of this particular case.

A look back to 2007

On December 13^th, 2007 BID for Position, LLC filed a patent infringement lawsuit against Google, Inc., AOL, LLC and Microsoft, Inc. in, yes you guessed it, the Eastern District of Virginia Court. This lawsuit claimed that the Konia patent awarded to BID, LLC in 2007 was being infringed upon by Google Adwords and its customers. Looking familiar yet? Hold on, it gets worse. On August 25^th 2008, a motion was filed by the defendants to bring a wholly inexperienced lawyer onto the team, i.e., Jamie Lee Lisagor. While this is not likely a strategic move but rather a way to give new lawyers experience in such cases, it does mirror the recent motion to bring yet another greenhorn onto the I/P Engine lawsuit, Sarah Agudo (graduated law school in 2010 and has a background in criminal law, not patent law). The timing is highly suspicious because Ms. Lisagor was brought onto the case near the tail end of the proceedings, likely to witness the final motion hearings after the legal strategy was well-defined.  The same pattern seems to be forming for Sarah Agudo in the Vringo case.

The troubling part of this prior case for Vringo investors is its ultimate conclusion. Specifically, Google et al, using nearly an identical legal team of Stephen Noona (local counsel) and the Quinn Emanuel, Urquhart & Sullivan LLP combo of Emily O’Brien and David A. Perlson, won a Summary Judgement for Non-infringement and Invalidity based on Prior Art v BID for Position, LLC. The case was subsequently dismissed without prejudice. So yes, they did win in the Eastern District of Virginia on a patent infringement case before.

The Vringo Case: A look ahead 

The recent flurry of August filings in the I/P Engine v Aol et al. show nearly an identical pattern to the BID for position case. Namely, Google’s legal team has just raised the issue of Prior Art with three patents they claim invalidate Vringo’s claim of infringement: i.e., Bowman, Culliss, and Ryan. Interestingly, they did so post-Markman ruling, and thus, Vringo’s main lawyer (Mr. Sherwood) has moved to have these references stricken via a Discovery Sanctions motion. Essentially, Vringo is arguing that Google withheld prior knowledge of these patents, and the time to disclose them was the Markman hearing. As such, they should not be allowed into the proceedings at this time. Google has filed a series of counter-motions arguing simply that Vringo did not ask for these particular patents, and no particular time constraints for disclosure of Prior Art was stated. Therefore, they did not have to disclose them pre-Markman and they should be allowed into a trial as evidence. 

The forthcoming ruling to allow or strike these Prior Art references is going to be the crux of this case in our opinion. If Google’s legal team wins this ruling, they will surely pursue the exact same legal strategy that won them Summary Judgements for non-infringement against the likes of BID, LLC, Bright Response, PSET, and Performance Pricing previously. Namely, they will use these three patents to claim Prior Art and move for a Summary Judgement for Invalidity. Overall, Mr. Perlson was instrumental in Google triumphing in each of these prior cases, and he is undoubtedly following the same playbook in the Vringo case. The next week or so should thus be extremely important for Vringo’s patent case.

Despite the previous success of this legal strategy, each case needs to be viewed on its own merits. It is our opinion that Google may very well lose this ruling because it is in fact a dirty legal tactic. Vringo has stated in its motion for Discovery Sanctions that Google et al. knew of this Prior Art before the Markman hearing, and purposely withheld it. The fact that Google didn’t bring up these patents in the Markman hearing does speak to how their own lawyers view this case in our opinion. If this Prior Art clearly and unequivocally invalidated the Vringo patents, they surely would have laid it out at the Markman hearing and subsequently moved for a dismissal. Why continue to mount up legal fees and possibly annoy the Judge when the case could have been concluded quickly? This tactic of “surprising” Vringo with Prior Art post-Markman and less than two months from trial is nothing less than a delay tactic in our opinion. Even so, Google et al. may win such a last minute “Hail Mary” ruling. With Mr. Perlson at the helm of Google’s legal ship, nothing should be taken as a given for Vringo investors. 

Disclosure: Enhydris Private Equity, Inc. is long VRNG.

Disclaimer: Enhydris Private Equity, Inc. @blogspot is a publication of general circulation under SEC v. Lowe, and does not act as investment advice in any way, shape or form. Enhydris does not advocate the purchase or sale of any security or investment for any specific individual.