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Apple loses VirnetX patent trial, ordered to pay $368M

post #1 of 47
Thread Starter 
In a late-night ruling from a federal jury in Texas on Tuesday, Apple was ordered to pay $368 million for violating a VPN patent owned by software company VirnetX.

Along with the suit decided today, VirnetX also filed complaints with the U.S. International Trade Commission alleging that Apple's products, specifically the iPhone, iPad and Mac, violate the company's wireless patents, reports AllThingsD. VirnetX previously won a $200 million settlement from Microsoft as a result of a separate lawsuit.

The Texas complaint against Apple was first leveled in November 2011, when VirnetX claimed technology being used in Apple's iPhone 4S infringed on the company's patent for U.S. Patent No. 8,05,181 for a "Method for Establishing Secure Communication Link Between Computers of Virtual Private Network." According to the invention's filing, the patent was granted just days before being leverage against Apple in court.

VirnetX lodged a similar complaint with the ITC, however in August, the commission sided with a trade judge's ruling who terminated the case over questions of patent ownership. The company vowed to file a new complaint.

In yet another VirnetX filing in 2010, the company brought similar allegations against Apple, Cisco Systems, Astra Technologies, and NEC Corporation, claiming infringement of at least five patents.
post #2 of 47
This non-practicing entity also managed to win a patent suit against Microsoft.

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post #3 of 47

Cisco is still in their crosshairs too. Between the $200M from Microsoft a couple years ago and the $360M from Apple today they're definitely cashing in. 

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post #4 of 47

Damn, I should've been a patent troll.

post #5 of 47

As I have read, the four patents in the trial and the one at the ITC, are being reviewed by the USPTO  at Apple’s and Cisco's request. And they preliminarily rejected the claims.

post #6 of 47
You know the best thing about watching Apple in litigation?

If they win, they collect payment, then proceed kicking ass.

And if they lose, they make payment, then proceed kicking ass.

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post #7 of 47
Quote:
Originally Posted by GTR View Post

You know the best thing about watching Apple in litigation?
If they win, they collect payment, then proceed kicking ass.
And if they lose, they make payment, then proceed kicking ass.
Ain't the world a grand place!

I expect them to appeal and have this overturned, like they did with the $650 million decision they had overturned earlier this year.
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post #8 of 47
We need to hurry and give Texas back to its rightful owners! Mexico.
post #9 of 47

Appeal it like they did with Mirror Worlds.

post #10 of 47
Quote:
Originally Posted by TeeJay2012 View Post

As I have read, the four patents in the trial and the one at the ITC, are being reviewed by the USPTO  at Apple’s and Cisco's request. And they preliminarily rejected the claims.

Rejected who's claims? Those by Apple or those by VirnetX...?

 

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post #11 of 47
Quote:
Originally Posted by AppleInsider View Post

In a late-night ruling from a federal jury in Texas on Tuesday ordered Apple to pay $368 million for violating a VPN patent owned by software company VirnetX.

That doesn't make sense. Try...

In a late-night ruling from a federal jury in Texas on Tuesday, Apple was ordered to pay $368 million for violating a VPN patent owned by software company VirnetX.
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post #12 of 47

$368 million? Holy fucking shit. They don't even have a shipping product with that patent. How can a judge award something like this? Shameful. 

post #13 of 47
Quote:
Originally Posted by Macky the Macky View Post

Rejected who's claims? Those by Apple or those by VirnetX...?

 


Cisco filed a request for re-examination one of the patents listed in the "similar allegations" story. That was denied.   Apple and Cisco also filed another request a different patent. That was accepted.

 

http://www.reuters.com/finance/stocks/VHC/key-developments/article/2453463

 

http://www.cipherlawgroup.com/blog/u-s-patent-office-orders-reexamination-of-virnetx-patent-on-requests-by-apple-and-cisco/

 

Other than today's story that's about it involving these players.

post #14 of 47

Apple's representative, lawyer Danny Williams, told the jury that "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.

 

A very wise observation. . . 

Is Apple saying small insignificant uses of unlicensed IP shouldn't get major penalties (such as sales injunctions or $100million+ jury awards), being small parts of large complex products? I agree with them.


Edited by Gatorguy - 11/7/12 at 3:30am
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post #15 of 47
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Originally Posted by Slurpy View Post

$368 million? Holy fucking shit. They don't even have a shipping product with that patent. How can a judge award something like this? Shameful. 

The jury found it was used in Facetime.

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post #16 of 47
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Originally Posted by FreeRange View Post

We need to hurry and give Texas back to its rightful owners! Mexico.


http://en.wikipedia.org/wiki/History_of_Texas

 

I'd say Spain, or France.

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Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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post #17 of 47

 

 

Quote:

A very wise observation. . . 

Is Apple saying small insignificant uses of unlicensed IP shouldn't get major penalties (such as sales injunctions or $100million+ jury awards), being small parts of large complex products? I agree with them.

 

 

I see what you did there.

 

And it's not even remotely analogous.

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post #18 of 47
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Originally Posted by TheMacadvocate View Post

 

I see what you did there.

 

And it's not even remotely analogous.

How so? Simply because you'd rather it wasn't?

 

VirnetX is still trying to get Apple's iPhone and iPad banned from the US marketplace, obviously as a bargaining tool, for infringing on this particular patent. Fair penalty if the ITC were to rule in their favor? As fair as banning a particular smartphone for using an overscroll bounce at page ends in an otherwise "very large, complex product"? Think it over and then explain the difference.

http://www.zdnet.com/virnetx-refiles-apple-patent-complaint-to-itc-7000002915/
Edited by Gatorguy - 11/7/12 at 4:50am
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post #19 of 47
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Originally Posted by Buckus Toothnai 
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My, if I only had the time to take apart this hilarious piece of...wow. The (single/childless) man I was 10 years ago would've taken a flamethrower to your tripe.

You're selectively factual - maybe one out of every 5 - and you fill in the rest of your rant with stunningly inaccurate connective tissue.

 

I do commend you on your word count, however.

 

/shows self out  

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post #20 of 47
Quote:
Originally Posted by Buckus Toothnai 
post

 

 

Dude, perhaps you missed it, but Apple just won a billion dollar suit against Samsung. The jury there found that Apple obtained a license to use Samsung's FRAND patents through the third party Apple bought the broad band chip from (Qualcomm) and as such Apple doesn't have to pay Samsung anything. Apple is using a LTE broadband chip from Qualcomm as well, and as such, Qualcomm paid the licensing fee. Companies like Motorola and Samsung in many cases are trying to double dip. The chip manufacturer took out a license that Apple rightfully claims covers it. In other cases, Apple is not disputing it has to pay to use FRAND patents. It only disputes the amount. Further, like in the Nokia case, Apple has already set the money aside to pay Motorola. It isn't even counted as part of its cash holdings. Accounting rules require it. 

 

Like another poster said, Apple will appeal. It might lose, but considering how Apple recently got a 660 million dollar judgement thrown out and the plaintiff got squat Apple will likely either pay nothing or settle to pay significantly less. 

 

Finally, I am too lazy to look it up for you, but a news article recently explained Google didn't offer a LTE Nexus phone because the carriers were not on board with Google making such an offering. You see the carriers want a strong third party OS to compete with Android and iOS. Moreover, use your head. When is the last time Google was concerned about using somebody else's IP? I will make it easy for you. Never. Google, like Apple, knows the parties holding LTE technology have to license it to parties like Google at FRAND rates. That, however, doesn't mean the carriers are required to allow Google to run a LTE phone on its network. 

post #21 of 47
Quote:
Originally Posted by Gatorguy View Post

How so? Simply because you'd rather it wasn't?

 

VirnetX is still trying to get Apple's iPhone and iPad banned from the US marketplace, obviously as a bargaining tool, for infringing on this particular patent. Fair penalty if the ITC were to rule in their favor? As fair as banning a particular smartphone for using an overscroll bounce at page ends in an otherwise "very large, complex product"? Think it over and then explain the difference.

Simply because it simply isn't because. Anyone who's spent any time tracking the Apple patent beat wouldn't need to think it over.

 

-VimetX didn't patent the technology it is suing over - it acquired it from a defense contractor in 2006. All of the patents Apple has sued over were filed by Apple.   ---The overscroll ban was the "last standing" of several patents that were originally filed for. The courts determine which one(s) stick. VirnetX is suing over one.

-VirnetX is using the troll capital of the U.S. Eastern District of Texas courts to pursue its claims. That fact alone tells an objective observer all they need to know.

 

And these are obvious differences. Maybe you should dive a little deeper into your litigation history.  

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post #22 of 47
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Originally Posted by TheMacadvocate View Post

Simply because it simply isn't because. Anyone who's spent any time tracking the Apple patent beat wouldn't need to think it over.

 

-VimetX didn't patent the technology it is suing over - it acquired it from a defense contractor in 2006. All of the patents Apple has sued over were filed by Apple.   ---The overscroll ban was the "last standing" of several patents that were originally filed for. The courts determine which one(s) stick. VirnetX is suing over one.

-VirnetX is using the troll capital of the U.S. Eastern District of Texas courts to pursue its claims. That fact alone tells an objective observer all they need to know.

 

And these are obvious differences. Maybe you should dive a little deeper into your litigation history.  

So the only difference is that particular piece of Apple IP was "homegrown" while VirnetX bought theirs, which according to you would make it somehow less valid? So if Apple were to sue at the ITC over something that was developed elsewhere (perhaps something Siri-related) then the two would be "remotely analogous", right?

 

I think you need to think it over (again) and take another shot at explaining how purchased IP isn't as valid as in-house developed, making one "ban-worthy" but the other not.

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post #23 of 47
Quote:
Originally Posted by Gatorguy View Post

So the only difference is that particular piece of Apple IP was "homegrown" while VirnetX bought theirs, which according to you would make it somehow less valid? So if Apple were to sue at the ITC over something that was developed elsewhere (perhaps something Siri-related) then the two would be "remotely analogous", right?

 

I think you need to think it over (again) and take another shot at explaining how purchased IP isn't as valid as in-house developed, making one "ban-worthy" but the other not.

Neither you nor I determine what is ban-worthy, the courts do. VirnetX is welcome to take their best shot at banning Apple products anywhere they like. Spoiler alert: it'll never happen.

 

I noted 3 differences between Apple's IP and you VirnetX's. You chose for some reason to focus on one. I don't need to "take a shot" at explaining anything - in bold or otherwise - especially if you can't be bothered to address the points already made. Maybe you can find some other commenters that will indulge your selective citation.

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post #24 of 47
Originally Posted by Gatorguy View Post
The jury found it was used in Facetime.

 

The patent troll is using FaceTime? So they're infringing on Apple's stuff?

 

Now do you see what he's saying?

post #25 of 47
Quote:
Originally Posted by TheMacadvocate View Post

Neither you nor I determine what is ban-worthy, the courts do. VirnetX is welcome to take their best shot at banning Apple products anywhere they like. Spoiler alert: it'll never happen.

 

I noted 3 differences between Apple's IP and you VirnetX's. You chose for some reason to focus on one. I don't need to "take a shot" at explaining anything - in bold or otherwise - especially if you can't be bothered to address the points already made. Maybe you can find some other commenters that will indulge your selective citation.

A suit in Texas (or perhaps Germany) makes the claimed IP less valid? Please explain. 

Home-grown vs. purchased IP makes one more valid than the other? Please explain

Apple is only suing over IP they developed themselves in-house? Check again.

http://www.fosspatents.com/2012/06/apple-wins-us-preliminary-injunction.html

 

That's all three addressed. Now you can try again.

 

In your opinion, would it be a fair penalty for Apple to have major products lines banned from sale in the US over a relatively minor piece of IP they were proven to infringe in a "large, complex product"? If not, why not.


Edited by Gatorguy - 11/7/12 at 6:34am
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post #26 of 47
Quote:
Originally Posted by Tallest Skil View Post

 

The patent troll is using FaceTime? So they're infringing on Apple's stuff?

 

Now do you see what he's saying?

Ah, I misunderstood his question. 

 

That's the definition of a Non-Practicing Entity isn't it? they don't practice the claimed IP, and lacking any products of their own are in effect impervious to cross-claims. Why do you think Nokia is making liberal use of NPE's , so-called "patent trolls"such as Sisvel and Mosaid? Why does the "patent troll" Rockstar Consortium exist (and where did their IP come from)? It keeps the hands behind the scenes clear of IP suits in retaliation, as well as offer plausible deniability.

 

Anyway, I don't want to stray off-topic with this. The original comment on small parts of big complex products made by Apple was simply an observation, which I agreed with.


Edited by Gatorguy - 11/7/12 at 7:40am
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post #27 of 47

I don't give a shit if the jury was right or not. I respect their decision, I'm not a patent specialist. Let Apple pay and end this problem.

 

@Buckus

Do you really think that anyone has the energy to real your whole piece? This isn't wikipedia.

post #28 of 47
Originally Posted by ClemyNX View Post
I don't give a shit if the jury was right or not. I respect their decision…

 

That says a lot.

post #29 of 47

As a long time lurker and Apple fan, the tides are slowly turning. 

 

When a company seems to almost stifle innovation of other companies simply due to the unfortunate fact of not evolving with its own technology, something is wrong.

 

I loved all of my Apple products and saw amazement technology leaps in their R/D over the past decade but that seems to have leveled off lately especially with the new Iphone with the 'tired and dated' layouts.  Why can't they update, why can't they perform technology refreshes instead of just rehashing the same design?  I need advice, I want to like Apple again and continue to support by purchasing their products but our own research and development teams have blatantly removed these products due to the overall poor business practices they have and seem to continue to display lately. 

 

Our MIS director made a determination that Apple seems to hate competition and their answers are to stifle innovation and creativity by placing inaccurate patent infringements against other companies. Just between us appleinsiders, we know Apple didn't invent most of the things they are placing infringements on.  This would be like Henry Ford placing a patent on the any car. Any 4-wheel vehicle is prohibited because Apple invented the bolt that holds the antenna on the car. This is over exaggerated of course but same concept. Is there anything we can do to stop these practices?

 

It used to be a great feeling to support Apple but with other companies starting to win lawsuits against them and these infringements being over ruled or over turned due to obvious inaccuracies, my fear is our beloved Apple is slowly crumbling to now superior products and competition. Instead of working together, they waste money, time and resources and lose their direction.

 

A good friend is a export specialist for operations in the Far East and was discussing the costs for products and another topic surprised me about Apple. Apparently the manufacturing costs on the Mini is around $130.  Given that, I understand profit, marketing etc, but why would they price the Mini so close to the starting point of the full size Ipad? It doesn't make 'good' business sense.  It has a dated processor and other competition has superior displays, more memory, better CPU performance for less, so why would they make a boneheaded mistake like that? Are they trying to drown the company now?  I heard the latest lawsuit is about patent infringement on some camera effect called panorama, evidently there have been android based companies that developed first and not targeting Apple. 

 

MY last gripe is about a comparison to a competing product that our R/D team and MIS started investing in.  These products are open, meaning innovation and creativity is supported for more development.  Why wouldn't Apple learn from these ideas and invest in open source products that clearly provide better functionality, performance and the most important, INNOVATION!  Its sad to see these companies slowly devour Apple but I have to admit, you have to stand up for what is right and not let the big boys bully the smaller ones. I know Google, Microsoft, HTC, Samsung would have left Apple alone and (slowly fall apart by themselves) :-) but they pushed so now it seems sadly that they are fed up with their practices and going for the throat.

 

Is this truly how Jobs invisioned his empire? My thoughts are that he never intended to steal ideas, get caught, get sued and slowly die so what had happened? Apple can't continue to take everyone to litigation especially when they have no clear basis. This latest win by VirnetX, a small company but Apple learned the hard way not mess with these guys. I hate to admit it, but kind of glad Apple got some of their own medicine. Its a shame that other companies will now bully Apple but they could have changed their business tactics and prevented the slow downfall of their empire. Is there anyone that wants to help me draft some letters to the Apple heads and let them know we are not proud owners of these products lately?  I know our company spends on average around $200k with our marketing and development teams and for the most part, equal nothing compared to other companies but the fact that we stopped using their products due to their practices lately, to me it says a lot. I hope we can ban together as past and former Apple fans and help them survive.

post #30 of 47
Originally Posted by ENiac2009 View Post
When a company seems to almost stifle innovation of other companies simply due to the unfortunate fact of not evolving with its own technology, something is wrong.

 

Samsung sucks, dunnit?

 

…especially with the new iPhone with the 'tired and dated' layouts.

 

I think it's hilarious that no one ever whines about OS X. "AWW MAN, A MENU BAR AGAIN?! SCREW YOU, APPLE. THIS IS TIRED AND DATED AND STALE."

 

Makes you wonder if these people have ever used a product before. Any product. 

 

 Why can't they update, why can't they perform technology refreshes instead of just rehashing the same design?

 

I dunno. Say, I have an idea! Let's change the way your car works… EVERY DAY. How's that feeling? Maybe today we'll put the steering wheel on the floor and the pedals up top. Oh, you… recognize that sometimes design shouldn't be changed because they have looked the same for a while. Okay.

 

I need advice…

 

Read The Design of Everyday Things, About Face, and Visual Thinking for Design. For starters. Then some stuff on the history of Apple. Say, Return to the Little Kingdom.

post #31 of 47
Quote:
Originally Posted by Gatorguy View Post

Apple's representative, lawyer Danny Williams, told the jury that "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.

 

A very wise observation. . . 

Is Apple saying small insignificant uses of unlicensed IP shouldn't get major penalties (such as sales injunctions or $100million+ jury awards), being small parts of large complex products? I agree with them.

 

They didn't say they are using them.

 

Appeal time.

 

Does Apple even use DNS?

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post #32 of 47
Quote:
Originally Posted by hill60 View Post

 

They didn't say they are using them.

 

Appeal time.

 

Does Apple even use DNS?

I don't think the chances of an Apple appeal was even a question. Of course they will. IMO they'll end up paying something, but probably not $360M+

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post #33 of 47
Quote:
Originally Posted by ENiac2009 View Post

As a long time lurker and Apple fan, the tides are slowly turning. 

 

When a company seems to almost stifle innovation of other companies simply due to the unfortunate fact of not evolving with its own technology, something is wrong.

 

 

Innovation in the mobile space seems to be proceeding quite nicely in spite of Google and Samsung seeking to destroy the standards based system all the innovation is based on.

 

Didn't bother reading the rest of your paid product placement like trash.

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post #34 of 47
Quote:
Originally Posted by hill60 View Post

 

Innovation in the mobile space seems to be proceeding quite nicely in spite of Google and Samsung seeking to destroy the standards based system all the innovation is based on.

 

Didn't bother reading the rest of your paid product placement like trash.

You forgot to add in Nokia, who sued Apple over SEP's and demanded a sales injunction as an appropriate remedy.

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post #35 of 47
Quote:
Originally Posted by Gatorguy View Post

You forgot to add in Nokia, who sued Apple over SEP's and demanded a sales injunction as an appropriate remedy.

 

...and settled at obviously agreeable FRAND rates.

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post #36 of 47
Quote:
Originally Posted by hill60 View Post

 

...and settled at obviously agreeable FRAND rates.

...with a cross-licensing agreement giving access to some Apple IP that Nokia needed. How would this be different from what Motorola requests?

 

EDIT: We should probably have this discussion in the Moto/Apple FRAND thread. My apologies.

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post #37 of 47
dear mexico,

we're really sorry about that whole alamo thing.
please take texas.

sincerely,
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post #38 of 47
Quote:
Originally Posted by Gatorguy View Post

...with a cross-licensing agreement giving access to some Apple IP that Nokia needed. How would this be different from what Motorola requests?

 

EDIT: We should probably have this discussion in the Moto/Apple FRAND thread. My apologies.

 

Obviously Google's demands for 2.25% are not agreeable, to either Apple, Microsoft and the various agencies looking into the antitrust nature of using standards essential patents teamed with extortionate demands and selective license cancellations with chipmakers to stifle competition and innovation.

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post #39 of 47

For the amusement of those who like to cite Henry Ford as a potential patentee of the automobile:

http://en.wikipedia.org/wiki/George_B._Selden

 

Also:  http://en.wikipedia.org/wiki/The_Wright_brothers_patent_war

 

Cheers

post #40 of 47
I want to see them go against Cisco. Incidentally if Cisco wins does that mean Apple is in the clear because they use Cisco's VPN software.
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