Subject: Vringo, Inc. (VRNG) - Seems to be Proving its Case for Infringement.
Importance: High
This email is just a quick overview from Day 3 of the Trial in the Case of: “I/P Engine, Inc. v. AOL, Inc. et al” (Case #11-00512 in the Eastern District of Virginia). (I hope to provide more detailed updates of the actual testimony in later emails.) Day 3 of this Trial was on Thursday, October 18, 2012.
The first part of Day 3 was a string of video-deposition testimony from employees of Google that described how Google's AdWords, AdSense, SmartAds ("SmartASS"), Quality Scores, and other items work. Since Vringo's infringement explanations to the Jury tend to be based on Google's internal and external Documents about its "Quality Score," there was also a fair amount of testimony on how these Documents were produced, their reliability, and how accurately the concept of Quality Scores track the actual source code and algorithms that Google uses.
The Day-3 witnesses included: Jonathan Diorio (a Senior Business Product Manager at Google), Gary Holt (a Software Engineer at Google), and Bartholomew Furrow (a Google employee who works on AdWords).
I believe that Gary Holt was a great witness for Vringo, Inc. (VRNG). I believe that he appeared to be visibly evasive when asked sensitive questions. In my notes, I wrote: "You could feel this guy stress and squirm at key points!" I also believe that despite the appearance of trying to stretch the truth for Google, he essentially admitted that AdWords uses "Content-Based Filtering." I also believe that he looked ridiculous when he tried to Claim that the "pCTR" (predictive Click-Through Rate) was not a "Rating." He said that a Rating could be on a scale of 1 to 10, but he would not concede that the Zero-to-One probabilities generated by SmartAds that AdWords uses to rank ads is a form of Rating system. Despite his insistence, he appeared to not be able to find any logic to justify his opinion!
After Lunch (2:20 PM ET on Thursday, October 18th), Dr. Frieder took the stand as a live witness. He is I/P Engine's Expert Witness on Infringement. I believe that so far he has done a very convincing job of showing the Jury that Google's AdWords practices each and every element and limitation of Claim 10 in Vringo's '420 Patent. He had a chart with the words of Claim 10 broken down into its individual elements, and he had I/P Engine's attorney "check-the-box" as he demonstrated how Google practices each and every element. He also did this by showing the Jury actual Google Documents describing the functionality.
So far, I believe that I/P Engine seems to be proving its case for Infringement; however, it is important to note that Dr. Frieder has not yet been Cross-Examined, and Google has not yet presented its Case-in-Chief. So this opinion is still subject to change.
Today (Friday, October 19th), it currently appears that the Jury will only hear evidence from 10:00 AM to 12:00 Noon ET, and that the Courtroom will be closed to the public during this period. So there will likely be nothing for the public to attend today. The reason for closing the Courtroom is that Google requested that its confidential information is not disclosed as to the Source Code and particular algorithms currently used in Google's AdWords, because this could be used by advertisers to game-the-system. It appears that next week some material may be becoming public that Google is not happy about. Judge Jackson tends to want more open to the public than Google does!
Importance: High
This email is just a quick overview from Day 3 of the Trial in the Case of: “I/P Engine, Inc. v. AOL, Inc. et al” (Case #11-00512 in the Eastern District of Virginia). (I hope to provide more detailed updates of the actual testimony in later emails.) Day 3 of this Trial was on Thursday, October 18, 2012.
The first part of Day 3 was a string of video-deposition testimony from employees of Google that described how Google's AdWords, AdSense, SmartAds ("SmartASS"), Quality Scores, and other items work. Since Vringo's infringement explanations to the Jury tend to be based on Google's internal and external Documents about its "Quality Score," there was also a fair amount of testimony on how these Documents were produced, their reliability, and how accurately the concept of Quality Scores track the actual source code and algorithms that Google uses.
The Day-3 witnesses included: Jonathan Diorio (a Senior Business Product Manager at Google), Gary Holt (a Software Engineer at Google), and Bartholomew Furrow (a Google employee who works on AdWords).
I believe that Gary Holt was a great witness for Vringo, Inc. (VRNG). I believe that he appeared to be visibly evasive when asked sensitive questions. In my notes, I wrote: "You could feel this guy stress and squirm at key points!" I also believe that despite the appearance of trying to stretch the truth for Google, he essentially admitted that AdWords uses "Content-Based Filtering." I also believe that he looked ridiculous when he tried to Claim that the "pCTR" (predictive Click-Through Rate) was not a "Rating." He said that a Rating could be on a scale of 1 to 10, but he would not concede that the Zero-to-One probabilities generated by SmartAds that AdWords uses to rank ads is a form of Rating system. Despite his insistence, he appeared to not be able to find any logic to justify his opinion!
After Lunch (2:20 PM ET on Thursday, October 18th), Dr. Frieder took the stand as a live witness. He is I/P Engine's Expert Witness on Infringement. I believe that so far he has done a very convincing job of showing the Jury that Google's AdWords practices each and every element and limitation of Claim 10 in Vringo's '420 Patent. He had a chart with the words of Claim 10 broken down into its individual elements, and he had I/P Engine's attorney "check-the-box" as he demonstrated how Google practices each and every element. He also did this by showing the Jury actual Google Documents describing the functionality.
So far, I believe that I/P Engine seems to be proving its case for Infringement; however, it is important to note that Dr. Frieder has not yet been Cross-Examined, and Google has not yet presented its Case-in-Chief. So this opinion is still subject to change.
Today (Friday, October 19th), it currently appears that the Jury will only hear evidence from 10:00 AM to 12:00 Noon ET, and that the Courtroom will be closed to the public during this period. So there will likely be nothing for the public to attend today. The reason for closing the Courtroom is that Google requested that its confidential information is not disclosed as to the Source Code and particular algorithms currently used in Google's AdWords, because this could be used by advertisers to game-the-system. It appears that next week some material may be becoming public that Google is not happy about. Judge Jackson tends to want more open to the public than Google does!
Sentiment: Strong Buy
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