The battle rages on between Bulls and Bears of Vringo (VRNG) stock over the VRNG Vs Google patent infringement case.

The latest Bear attack involved an anonymous poster that goes by the handle Modernist on Seeking Alpha (see Seeking Alpha article entitled Vringo’s Alpha Is Set To Reverse

The anonymous poster Modernist writes, “But Vringo’s victory is far from likely, and there is an immediate chance of the stock declining… Google Could Win A Summary Judgment Dismissal Based On Prior Art”.

Modernist goes on to site his source that Google could get a dismissal based on prior art as the Enhydris Private Equity Blog. However, if someone was to actually click on the link and go to the Enhydris article, they would quickly realize that Enhydris (which discloses they are long VRNG) believes the request for dismissal is nothing but a “dirty legal trick” that is likely to be thrown out. Enhydris writes:

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.

Defining Google’s request for a summary judgment dismissal as a “dirty legal tactic” has merits. This is not the first time Google has used this legal strategy. On December 13th, 2007 BID for Position, LLC filed a patent infringement lawsuit against Google, Inc., AOL, LLC and Microsoft, Inc. This lawsuit claimed that the Konia patent awarded to BID, LLC in 2007 was being infringed upon by Google Adwords and its customers. Google won this very similar suit on summary judgment using prior art.

The Modernist article uses this previous win by Google using prior art as strong evidence that Google will win using this same strategy against VRNG. The problem with Modernist’s logic is that when Google won with this strategy, it was the first time it had been used. This is important because in this win, Google claimed that they did not have this knowledge prior to the Markman Hearing. However, when Google tried to use this strategy again versus Oracle, the courts were ready for it and prohibited the prior art post-Markman information from being used in court.

As Seeking Alpha member Asia24 wrote in a blistering critique of Modernist’s article:

Google knows the way the game is played and had their day in court. Now Judge Jackson is forced to re-exam evidence take time from an already decided hearing and answer. It can cause delays and as everyone knows this is a “rocket docket” case. He should immediately dismiss this situation and hold to the decision he made.

This is working against Google right now because they tried this in the Oracle vs Google trial and it was not allowed in. They gave 6 prior arts which VRNG wasn’t scared about, Another 3 wont matter just a stall tactic. The ruling about these to be thrown out would put Google in a deep hole. If they allow them in it might stall the start date because VRNG will need time to cross examine the prior art. (not sure this court will allow it.)

This tactic, unfortunately, is characteristic of Google. In Oracle America, Inc. v. Google Inc., Case No. 10-cv-03561, 2011 WL 3443835 (N.D. Cal. Aug. 8, 2011), Google likewise delayed in disclosing its prior art invalidity theories. There, as here, Google waited until after Markman to make its disclosure. There, as here, Google knew of the prior art months before disclosure. There, as here, Google’s tactics created unjustifiable prejudice to the patentee. There, the untimely prior art was stricken as a discovery sanction. The same result is appropriate here.

On January 24, 2012, Google and its co-defendants served joint Preliminary Invalidity Contentions, which included element-by-element claim charts showing how six prior art references supposedly anticipated or rendered obvious the patents-in-suit. On February 13, 2012, Google’s counsel stated that “Google produced all of the prior art it has identified on December 16, 2011.”

As a result of a meet and confer, Google agreed to supplement its Preliminary Invalidity Contentions by no later than March 2, 2012. Google did not supplement its invalidity contentions on March 2, however. Instead, in a footnote of a four page letter summarizing her recollection of a meet and confer the previous day, Google’s counsel stated “there is no further art for us to identify in our invalidity contentions today.” I’m sure judge Jackson wont be looking to favorable at the Google attorneys another time round.

Fast forward to the present, this is the third time Google will be trying to use the prior art argument with discovery after the Markman Hearing legal tactic. The crux of this argument is that Google has to prove they did not know about these prior art patents until after the Markman Hearing. However, this being the third time that Google is using this exact same legal strategy, it’s impossible to argue that they “did not know about these prior art patents” ahead of time.

I’m long VRNG September calls at $4. I’m starting to think I should have purchased the October calls or later.

In this episode, I look at the latest legal drama surrounding Vringo (VRNG) Vs Google.