NEW YORK - March 16, 2015 -
Vringo, Inc. (NASDAQ: VRNG), a company engaged in the innovation,
development and monetization of intellectual property, today
announced operating results for the year ended December 31, 2014,
provided an update on its global enforcement actions and filed with
the Securities and Exchange Commission its Annual Report on Form
10-K.
"2014 was a volatile year for
Vringo and its shareholders. The year began on a high note
with favorable rulings in our case against Google when the U.S.
District Court for the Eastern District of Virginia determined that
Google's alleged "workaround" failed to avoid infringement.
The court later enhanced the ongoing royalty rate owed to us by
Google from 3.5% to 6.5%. In May, the U.S. Court of Appeals for the
Federal Circuit heard Google's appeal, and our cross-appeal, of the
underlying judgment. However, in mid-August, in a split 2-1
decision, the Federal Circuit held that the asserted patents were
invalid for obviousness and reversed the District Court's judgment
against Google," said Andrew D. Perlman, Chief Executive Officer of
Vringo.
Mr. Perlman continued, "It goes
without saying that I, along with the rest of the Vringo team, was
very disappointed by the outcome from the Federal Circuit. David
Boies, who we engaged to represent us as we seek certiorari at the Supreme Court of the United States,
said it best:
Ken Lang
invented and patented technology that a federal judge and jury
found Google was infringing. The appellate court's conclusion that
these patents aren't valid cannot be reconciled with the fact that
eight different examiners at the U.S. Patent and Trademark Office,
the jury that heard evidence in this case for over two weeks, the
U.S. District Court judge who presided over the trial, and the
dissenting judge at the Federal Circuit all concluded that the
patents are valid and should be upheld.
We will exhaust all avenues for
relief from the ruling entered by the Court of Appeals for the
Federal Circuit.
We intend to file our petition to
seek certiorari with the Supreme Court of the
United States on or before May 14, 2015.
We are continuing to enforce our
patent rights against ZTE, which remains unwilling to license
Vringo's patents on fair, reasonable, and non-discriminatory
("FRAND") terms. In executing Vringo's multi-faceted global
legal strategy, our legal team performed admirably and we were able
to achieve victories around the world in 2014 and early 2015. This
included favorable rulings in a number of jurisdictions, including
Brazil, Romania, the Netherlands, and, most notably, in the United
Kingdom.
In the United Kingdom, the court
found that ZTE infringed a valid Vringo standard-essential
telecommunications patent. This is one of the only
telecommunications infrastructure standard-essential patents that
has been found valid and infringed in the history of UK patent
litigation. We believe that this ruling is a clear
demonstration of the strength of Vringo's infrastructure patent
portfolio, and the strength of Vringo's litigation against ZTE
worldwide.
Elsewhere around the world, Vringo
has obtained injunctive relief against ZTE in Romania, Brazil, and
Germany. ZTE has attempted to evade these injunctions through the
courts, and has asserted that it is losing significant revenue as a
result. Nevertheless, courts in these countries have, time and time
again, upheld the injunctions. In addition, further lawsuits
against ZTE are pending in France, Germany, India, Malaysia, the
Netherlands, Australia, and the United Kingdom.
Patent litigation does not come
without risk. In Germany, Vringo unfortunately lost a hearing
against ZTE relating to mobile handset technology. The
patents in this case, which were found not infringed, are not
standard-essential patents and are not related to any of patents
being litigated in the UK or for which Vringo has obtained an
injunction. We have appealed this ruling in Germany and will update
shareholders in the future on the outcome.
In addition, we are engaged in
litigation in the U.S. District Court for the Southern District of
New York, seeking damages for ZTE's breach of our mutual
non-disclosure agreement, which we signed in an effort to bring
resolution to all the litigations around the world. The Court has
already issued a temporary restraining order, preventing ZTE from
further violations of the NDA. Vringo has now requested that the
court decide a global royalty rate for its portfolio of
standard-essential telecommunications patents. Vringo looks forward
to receiving ZTE's response and proceeding towards trial.
While we continue to prove the
strength of our portfolio in litigation around the world, we
continue to attempt to engage ZTE in meaningful negotiations that
we hope will lead to a license on FRAND terms.
The fourth quarter was
exceptionally cash intensive due to trials in the United Kingdom,
and actions in the Netherlands, Romania, Brazil and the preparation
for trials on infringement and validity in Germany. Due to our
current phase of litigation, we estimate that our year over year
cash spend will be dramatically lower in 2015 than in
2014.
We remain committed to licensing
our intellectual property assets to willing parties and we look
forward to securing favorable licenses for the company as we
continue to execute on our business plan."
Operating Results for the Year
Ended December 31, 2014
-
As of December 31, 2014, we had approximately
$18.1 million in cash and court deposits. As of March 16, 2015, we
had approximately $16.1 million in cash and court deposits.
-
Our net loss from continuing operations was
approximately $109 million for the year ended December 31, 2014
(including approximately $80.2 million of net non-cash expenses),
mainly attributable to the following:
-
Operating legal costs of $24.0 million, mainly
in connection with ongoing litigations against ZTE Corporation,
Google, Inc., ASUSTeK Computer, Inc., and certain of their
affiliates and customers, and other planned enforcements of our
intellectual property.
-
General and administrative, and other expenses
of $6.9 million.
-
Non-cash expenses of $82.4 million mainly
related to a goodwill impairment charge during the fourth quarter
of approximately $65.7 million. Other non-cash expenses during 2014
included $11.0 million related to equity-based compensation costs
and $3.8 million of amortization related to our patents. Also
included is a one-time impairment charge of $1.4 million related to
certain patents during the third quarter of 2014.
-
Non-cash income of $2.2 million related to the
valuation of warrants.
-
During 2014, we recorded revenues of
approximately $1.4 million.
-
On a per share basis, our total net loss (from
both continuing and discontinued operations) was $1.23 per basic
share for the year ended December 31, 2014, compared to a net loss
of $0.63 per basic share for the year ended December 31, 2013.
Total diluted net loss per share was $1.24 for the year ended
December 31, 2014, compared to a diluted net loss of $0.63 per
share for the year ended December 31, 2013.
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 600 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. For
more information, visit: www.vringo.com.
Forward-Looking
Statements
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; our inability to protect our intellectual
property rights; 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 a
major securities exchange; 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; the future success of Infomedia and our ability to receive
value from its stock; our ability to continue as a going concern;
our liquidity 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 filed with the SEC on March 16, 2015. 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.
Contacts:
Investors and Media:
Cliff Weinstein
Executive Vice President
Vringo, Inc.
646-532-6777
cweinstein@vringoinc.com
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Vringo, Inc. via Globenewswire
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