, a full-service investment firm, headquartered in New York City, reiteratedtheir Buy rating for
(AMEX: VHC) in a research report issued toclients.
Updating the buy rating and thesis on the company, the analyst wrote, “Judge Leonard Davi
sissued his opinion regarding all post-trial motions last evening, February 26th. Overall the rulingwas as expected and favorable for VirnetX and its shareholders. It was stern but not extreme inany manner, the best outcome possible in our opinion
assuming the decision is appealed, we
believe it will be considered “reasonable” in the eyes of a panel/Federal Court of Appeals.
Because the final opinion issued last evening was very reasonable, in our opinion, Apple mustconsider whether it is worthwhile to pursue the matter via the appeals process. As indicated in
prior research, if AAPL were to appeal the decision, we do not view this to be an impediment.”
Highlighting other key points in the favorable ruling, the analyst further stated: “An injunction
s not imposed, nor did the Judge “assign” a royalty rate, which we expected –
however, theJudge has required the parties to meet via mediation and attempt to establish a licensingarrangement within a period of 45 days
net, the Judge took a constructive/firm but not extremetack, instructing the two parties to determine a reasonable arrangement on their own terms, the best outcome in our opinion
again, we feel a partnership is in the best interests of both parties.The Judge did conclude VirnetX provid
ed “substantial evidence” supporting a 1% royalty rate –
net, this is significant at it sets a precedent for any potential deals established with remaininglitigants and non-litigants in the future
investor concern/debate related to futurenegotiations/a
pplicable royalty rates should now abate.”
In conclusion, the analyst said, “Finally, as major litigation efforts appear to be winding down,
investors should focus on the company moving forward in an effort to establish licensingarrangements with non-litigants in the coming months. We anticipate the core strength of the
company’s model emerging during 2013.