Jury slaps Apple with $368.2 million fine over VirnetX patents

“VirnetX Holding Corp. (VHC) rose the most in more than two years after a federal jury said Apple Inc. (AAPL) should pay $368.2 million for infringing patents for virtual- private-network technology,” Susan Decker reports for Bloomberg. “A federal jury in Tyler, Texas, yesterday said Apple’s FaceTime function, used on the iPhone, iPod Touch and iPad as well as Mac computers, infringed four VirnetX patents. VirnetX had won a $200 million settlement from Microsoft Corp. in 2010 over the same technology.”

“‘This victory further establishes the importance of our patent portfolio,’ VirnetX Chief Executive Officer Kendall Larsen said in a statement,” Decker reports. “Following the verdict, Doug Cawley, a lawyer with McKool Smith in Dallas who represents VirnetX, said the company would seek an order to block further use of its inventions. Kristin Huguet, a spokeswoman for Apple, said yesterday the company had no comment.”

Decker reports, “The focus of the trial before U.S. District Judge Leonard Davis was on Apple’s FaceTime, which lets people use Mac computers to make video calls to an iPhone, iPod Touch or iPad. The Cupertino, California-based company said it used a different technology than what was covered by the VirnetX patents. ‘Apple does not owe money to VirnetX,’ Danny Williams, a lawyer with Williams, Morgan & Amerson in Houston who represents Apple, told the jury. ‘VirnetX is not entitled to money for things they did not invent. The VirnetX technology, if used, is a small part of very large, complex products.'”

Read more in the full article here.

MacDailyNews Take: Lovely. So, what’s next today for AAPL shareholders? Watch out for falling pianos, Jony!

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VirnetX awarded new security patent files new complaint against Apple – November 1, 2011


  1. I wish apple would just pay up instead of trying to fight it and losing the battle in the useless courts. Like apple did with the swiss railway clock design, they admitted infringement and paid up, apple got all the money, so why keep going to embarassing law suits

    1. Because the clock one was clearly valid. This is almost certainly bullshit as are most – about on a level with, “Uhh, there’ll be a camera, and uh, it’ll transmit a picture, and there’ll – uhhh – be some wires and chips involved.”

  2. … I said it was weird that Forstall (OSX, iOS. IOS devices make 60% of Apple’s profits) gets bashed like crazy and many calling for his head for maps (which many people find better than Google maps in their area) while the SVP of Apple Legal

    who is paid the same as the other old SVPs like Forstall with a 50,000 share bonus : about 90 million bucks gets away without any flames although legals got a terrible spotty record:

    — numerous case losses in Europe. Big ‘wins’ turn out to be nothing as for e.g Samsung Galaxy tab just needed a thin bezel to fulfill ban conditions (years of apple work can be copied with thin bezel!)

    Other ‘victories’ are for bans for products 1 or 2 generations ago i.e ‘no longer on sale’.

    — embarrassing ‘apology’ in U.K (I’m not talking about the ‘wording’ of the apology which needed to be changed but that legal lost so bad they had to make an apology in the first place)

    — various patent and copyright fiascos.
    E.g. having to pay 60 million for the iPad name from Proview which they should have owned originally from first purchase (i.e legal didn’t check China and Taiwan’s copyright laws adequately). 60 million is more than Amazon’s entire worldwide profits for this year — just for a name they should have known.

    Also paying a lot more for FRAND patents all around the world. Apple has complained over and over they are paying more than others for the same FRAND patents. Although the various world courts are sleepily waking up to the issue, apple legal has been unable to speed up the process.

    by the time legal gets the courts to move Google Motorola will be selling Nexus 25.

    — and alll the time they seem to pay HUGE amounts of money for patents while unable to defend most of their own.

    — the only substantial win for apple legal was the billion dollar judgment against Samsung in the U.S which seems to be more the jury chairman’s work (he’s an inventor himself with patents) in swaying the jury than anything (and because of that Samsung is appealing the verdict).

    If any other Apple dept had that kind of record:
    — iPhone 4s : Good. iPhone 5 BAD (i.e ‘ugly’ sucky, does not work design)
    — iPad Mini : Good. IPad 4: BAD

    He’ll be shot like Forstall.

    1. I forgot to add:

      Apple legal has been unable to stem Android which infringes on Apple’s I.P although Jobs at launch said they had patented the heck out of iPhone with over 200 patents. Android now has 75% of markeshare ( I know apple makes more profits but that has nothing to do with legal).

  3. Heres what i don’t understand…..

    “The Cupertino, California-based company said it used a different technology than what was covered by the VirnetX patents. Apple does not owe money to VirnetX”.

    So why the judgement for nearly $400Mil.

    Anyone care to explain?

  4. It Goes on to say in the Report that;

    “Apple can ask to have the verdict thrown out and, barring that, have the case reviewed by an appeals court in Washington that specializes in U.S. patent law.”

    This is far from Over, it will go to Appeal < Count On it.

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