NEW YORK (TheStreet) -- Vringo (VRNG) spiked 19.7% to $3.74 Wednesday after a U.S. District Court ruled in favor of the telecom's subsidiary in a patent lawsuit against a number of companies including Google (GOOG) and AOL (AOL).
The U.S. District Court for the Eastern District of Virginia ruled that Vringo subsidiary I/P Engine is entitled to "ongoing royalties" from the companies. The telecom sued Google, AOL and other companies saying their web search products infringed on patents that it owns.
The court deferred ruling on the royalty rates the companies will have to pay I/P Engine. The companies involved are scheduled to hold settlement talks before a U.S. Magistrate Judge later today.
On Nov. 6, 2012, a jury in the U.S. District Court in Norfolk, Va. ruled in favor of the Vringo subsidiary, awarding the company a "running royalty" rate of 3.5% and $30.5 million. On Jan. 3, 2014 the District Court ordered that I/P Engine receive an additional $17.32 million from the defendants to cover supplemental damages and prejudgment interest.
TheStreet Ratings team rates Vringo as a "hold" with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate VRINGO INC (VRNG) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and weak operating cash flow."