Patent Fight

Apple to pay ‘patent troll’ VirnetX $502.6 million

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A US federal jury in Texas ordered Apple to pay a total of $502.6 million to VirnetX for infringing on patents for secure communications after a protracted legal battle that has dragged on for eight years.

The ruling of patent infringement suggests that Apple’s FaceTime, VPN on Demand and iMessage features all infringe on VirnetX Holding’s patents. In fact, according to various reports, there were 4 patents that the court ruled were infringed upon. As far as the judgement goes, damages in the ruling were based upon the sale of Apple devices, with about 400 million sales in the period discussed during the ruling.

There have been multiple trials and the dispute has bounced between the district court, patent office and Federal Circuit since 2010.

According to the complaint, lodged in 2012, VirnetX alleged various Apple products, including iPhone, iPad, iPod touch and Mac, infringe on owned intellectual property related to secure data communications.

“The evidence was clear,” Kendall Larsen, CEO of VirnetX said after the verdict was announced.

“Tell the truth and you don’t have to worry about anything.”

Whether the verdict will stand remains to be seen. In 2016, the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board invalidated four VirnetX patents-in-suit in a related case, two of which were leveraged in the case decided here.

VirnetX is currently in the process of appealing the PTAB ruling with the U.S. Court of Appeals for the Federal Circuit in Washington, meaning the patents remain valid in the eyes of the court. The Federal Circuit declined to put the latest trial on hold as it expected a verdict to be reached prior to a potential patent validity ruling.

VirnetX is the kind of company often referred to as a patent troll. It said it offers some products including a “secure mail and messaging system called the Gabriel Collaboration Suite,” though SEC filings show they derive the entirety of their revenue from judgments in patent lawsuits.

Apple lawyers did not comment on today’s decision, though the company will most likely appeal.


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