According to its SEC filing, Vringo has settled its worldwide claims for patent infringement with ZTE. Vringo’s 8-K filing states, inter alia:
“On December 7, 2015, Vringo, Inc. and its affiliates (the “Company”) entered into a Confidential Settlement and License Agreement (the “Settlement Agreement”) with ZTE Corporation and its affiliates (“ZTE”), pursuant to which the parties agreed to settle all and any pending litigations and proceedings between the parties relating, among others, to patent infringements and patent invalidity claims. In addition, under the Settlement Agreement, the Company granted ZTE a non-exclusive, non-transferable, worldwide perpetual license of certain patents and patent applications owned by the Company.
ZTE will pay the Company a lump sum of $21.5 million in cash within 15 days following the execution of the Settlement Agreement. ZTE will also responsible for the payment of any withholding, value added or other taxes. Within ten days following receipt of the payment by the Company, the parties will withdraw all the pending litigations and proceedings.
The foregoing description of the Settlement Agreement is only a summary and is qualified in its entirety by reference to the Settlement Agreement. The Company intends to file a copy of the Settlement Agreement as exhibit to its Annual Report on Form 10-K for its fiscal year ending December 31, 2015, portions of which will be subject to a FOIA Confidential Treatment Request which will be submitted to the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. The omitted material will be included in the request for confidential treatment.”
A thoughtful blog by Jack Elllis from IAM, notes that in light of Vringo’s market cap and the increased difficulties of monetizing patents in recent years, the 21.5 million, while less than what many had expected or hoped for, “isn’t at all a bad result. “ This blog also notes that “this was the first time that a US-based NPE launched major litigation on multiple fronts worldwide with the United States being just one theatre – and arguably, not even the main one. Vringo’s adversary ZTE has its major presence in Asia, South America and eastern Europe.” The blog also summarizes proceedings in 12 of these theater of litigation operations.
I would love to see what the settlement agreement for all of these litigations looks like, particularly due to legal uncertainties in China regarding the regulations that would apply to a license agreement compared with a covenant not to sue.
This settlement will presumably put to rest the threat of sanctions in federal court against ZTE’s general counsel regarding breach of a non-disclosure agreement, which I previously discussed.