Vringo Inc. (VRNG) shares fell 18% after the patent assertion company said it lost a patent infringement case against ZTE Corp. and its German subsidiary ZTE Deutchland GmbH and ASUSTek Inc. and its German subsidiary ASUS Gmbh in the District Court of Dusseldorf, Germany.
Shares of Vringo fell 11 cents or 18% to 48 cents in early trading on the Nasdaq. They’ve traded between $5.45 and 46 cents over the past year.
One of the patents at issue was among a portfolio of more than 600 purchased for $22 million from Nokia in 2012. Vringo agreed to pay Nokia 35% of any recoveries but is entitled to recoup its initial investment before it has to pay Nokia. The other patent was purchased from Alcatel-Lucent for a non-material amount in 2013.
Other patent assertion companies including Document Security Services (DSS) and Pendrell Corp. (PCO) have had to write down the value of patents on their balance sheets as a result of adverse rulings.
Vringo officials declined to comment on whether the company would have to write down the value of the Nokia portfolio as a result of the ruling.
The District Court of Dusseldorf found that ZTE and ASUS did not infringe the German part of Vringo’s European Patent 0,748,136, which covers devices, including those with hotspot functionality, that provide data services between two different wireless/cellular networks. The court also ruled that ZTE and ASUS did not infringe the German part of Vringo’s European Patent 0,710,941, which covers navigation systems that provide traffic information.
Vringo said it will explore all possible remedies including appeal.
Vringo noted that under German law, the question of validity of patents is dealt with in separate proceedings and before different courts. As a result, the company said the District Court did not rule on the validity of the ‘136 and ‘941 patents.
The company added that corresponding nullity actions filed by ZTE and ASUS against the ‘136 and ‘941 patents are currently pending with the German Federal Patents Court. Hearing dates for those actions have not yet been set.
The company said these rulings do not affect any litigation on other patent families that it owns.
Vringo officials declined to comment.
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