Mobile software company Vringo Inc, best known for its video ringtones, is betting on recently acquired intellectual property to drive revenue growth as it battles several big names including Google Inc and ZTE Corp over infringement of its patents.
The company believes it can earn substantial revenue from its intellectual property at the center of the litigation, Vringo Chief Executive Andrew Perlman said. "We wouldn't be going through with (litigation) unless we are confident that we will get a positive outcome for us and our shareholders."
Shares of the company have gained about 56 percent since the beginning of the month following reports that its lawsuit against Google had merit.
Google's demand for a summary judgment was dismissed by a district judge on October 3, citing "genuine issues of material fact in dispute.
The lawsuit comes up for hearing on October 16, after the companies failed to reach a settlement on Tuesday, Perlman said.
Vringo inherited the lawsuit after it acquired Innovate/Protect (I/P), a company which specializes in monetizing intellectual property, in March.
I/P had filed a patent infringement lawsuit against AOL Inc, Google, IAC/InterActiveCorp-owned IAC Search & Media, Gannett Co Inc and Target Corp in 2011.
The lawsuit against Google involves two patents that I/P bought from Lycos, one of the biggest search engines of the 90's.
Vringo is seeking at least $696 million from Google, financial website iStockAnalyst had reported.
"It would be logical for Google to buy Vringo and then use them as a strategic patent weapon, for example, to sue Microsoft Corp," Maxim Group analyst John Tinker said.
Google declined to comment on the matter.
While Google is trying to fight it out, AOL partly settled the dispute in August paying $100,000.
"We settled with them (AOL) only for the use of their own in-house products, but not for their use of Google's products," said Perlman, who became CEO after the merger with I/P.
Vringo bought 500 wireless patents from Nokia in August to strengthen its intellectual property portfolio.
The company on Monday filed a patent infringement lawsuit against Chinese telecommunications equipment maker ZTE in the U.K. High Court of Justice.
The ZTE lawsuit involves patents acquired from Nokia, Perlman said.
He, however, declined to say if the company plans to pursue further lawsuits using the Nokia patents.
Shares of the company, which touched a life-high of $5.71 on Tuesday, closed at $4.67 on Wednesday on the American Stock Exchange. They have risen more than 300 percent since trading at 91 cents at the beginning of the year.
(This story was fixed to corrects quote in second paragraph)
(Reporting by Aditya Kondalamahanty and Sruthi Ramakrishnan in Bangalore; Editing by Sriraj Kalluvila)