U.S. judge denies Apple bid to overturn VirnetX patent verdict, could owe over $1.1 billion

A federal judge, U.S. District Judge Robert Schroeder in Tyler, Texas, on Friday denied Apple’s bid to overturn or reduce a $502.8 million patent infringement verdict favoring VirnetX Holding Corp, and awarded interest and royalties that could boost Apple’s total payout in two lawsuits above $1.1 billion.

Apple lawyers said that VirnetX’s award should not exceed $113.7 million, and that jurors should have been told the U.S. Patent and Trademark Office had deemed VirnetX’s claims “unpatentable.” The case relates to internet security technology (VPN) in features such as FaceTime. Many observers dub the Nevada-based VirnetX a “patent troll,” as it has no meaningful source of income outside of patent litigation.

Supreme Court Apple VirnetX. Image: Apple's Group FaceTime
Apple’s Group FaceTime
Jonathan Stempel for Reuters:

Jurors in October found that Apple infringed two VirnetX patents related to secure networks, known as virtual private networks, to which owners of various iPhones and iPads may connect.

Schroeder also awarded royalties of 84 cents per unit for future infringements, mirroring the rate set by the jury. Apple had said future royalties should be zero, or else no more than 19 cents per unit.

Last March, Apple paid VirnetX $454 million after the U.S. Supreme Court refused to hear the iPhone maker’s appeal in an earlier patent case.

In a Dec. 18 court filing, Apple said the latest award could boost its payout in both cases to $1.116 billion.

MacDailyNews Take: This long-running VirnetX saga — which we’ve been covering since November 1, 2011 — may finally be coming to an end.

It would have been far cheaper for Apple to just have bought the troll, even if via hostile takeover.

Here is VirnetX’s boilerplate description of the company: VirnetX Holding Corporation is an Internet security software and technology company with patented technology for secure communications including 4G LTE security. The company’s software and technology solutions, including its secure domain name registry and Gabriel Connection Technology™, are designed to facilitate secure communications and to create a secure environment for real-time communication applications such as instant messaging, VoIP, smart phones, eReaders and video conferencing. The company’s patent portfolio includes over 112 U.S. and international patents and over 75 pending applications.

13 Comments

  1. Good – APPLE DESERVES ALL THE PAIN POSSIBLE AFTER ITS DECLARATION OF WAR ON THE CONSTITUTION AND FREEDOM OF SPEECH THIS WEEK. And to think, I am a large shareholder of Apple. More pain. Lower the stock price. It can go to $0 for all I care.

      1. If those patents have been invalidated, why does the ruling still hold? Seems to me that fact that the ruling stands shows the patents in the case have yet to be invalidated if at all. Till then they are as valid as any other.

        1. Update: Reading up on the PTAB (Patent Trial and Appeal Board) ruling it appear that VirnetX disagrees with the ruling and is appealing. At the same time “Apple tried validity in 2012 and lost. That’s the reason Apple is estopped from pursuing validity in the district court cases.” As such the ‘validity’, at least for the case, is not a factor at this time.

  2. So the patents are invalid, yet the verdict of the trial against Apple remains, because Apple is not allowed to argue that the patents are invalid anymore, because Apple lawyers already used that argument during the initial trial (and the patents were invalidated only after that trial, and so the argument was dismissed during the trial). Yeah. Justice system.

    1. All patents are deemed valid upon issue, until they expire or are invalidated.
      When Apple infringed, they were valid. They didn’t fight the invalidation fight first, then use the invention.

      And that’s assuming that the patents in question are the invalidated ones. I don’t know or otherwise care.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.