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

Posted:
in General Discussion edited January 2014
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.
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Comments

  • Reply 1 of 49
    This non-practicing entity also managed to win a patent suit against Microsoft.
  • Reply 2 of 49
    gatorguygatorguy Posts: 18,261member


    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. 

  • Reply 3 of 49


    Damn, I should've been a patent troll.

  • Reply 4 of 49


    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.

  • Reply 5 of 49
    gtrgtr Posts: 3,230member
    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!
  • Reply 6 of 49
    hill60hill60 Posts: 6,989member
    gtr wrote: »
    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.
  • Reply 7 of 49
    freerangefreerange Posts: 1,569member
    We need to hurry and give Texas back to its rightful owners! Mexico.
  • Reply 8 of 49


    Appeal it like they did with Mirror Worlds.

  • Reply 9 of 49

    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...?


     


  • Reply 10 of 49


    Apple shamelessly ripping off VirnetX like the thieves they are. VirnetX spent billions developing the technology described in their patent. Apple saved billions in R&D by slavishly copying off of VirnetX.


     


    Hurts, doesn't it, Apple fanboys?

  • Reply 11 of 49
    mobiusmobius Posts: 373member
    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.
  • Reply 12 of 49
    slurpyslurpy Posts: 4,960member


    $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. 

  • Reply 13 of 49
    ufwaufwa Posts: 64member

    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.

  • Reply 14 of 49
    gatorguygatorguy Posts: 18,261member


    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.

  • Reply 15 of 49
    gatorguygatorguy Posts: 18,261member

    Quote:

    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.

  • Reply 16 of 49

    Quote:

    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.

  • Reply 17 of 49
    This is only the tip of the iceberg for Apple.

    Soon they'll be ordered to pay up BIG TIME to Motorola for violating its wireless patents. 

    Apple's lawsuit against Motorola claiming Motorola is asking for "unfair" licensing fees for use of its patents just got THROWN OUT by a judge in Wisconsin (too bad for Apple the trial wasn't held in San Jose with a jury member that held "extensive" holdings of AAPL stock and a jury foreman that lost a lawsuit against a subsidiary of the defendant that "ruined" his life).

    That means Apple will need to pay Motorola (a la Google) 2.25% of the retail price of EVERY iPhone and iPad EVER SOLD since the products' launches. That translates to BILLIONS of dollars and losses for Apple.

    Apple is also getting sued by HTC and Samsung for infringing on their LTE patents with the iPhone 5, iPad 4 and iPad Mini. By all accounts they have a VERY strong case with the judge already cautioning Apple that he’d have to be "overwhelmed with evidence" to rule that HTC’s LTE patents are invalid as requested by Apple's lawyers.

    If he doesn't rule HTC's patents as invalid, it's basically an air-tight case AGAINST Apple as Apple hasn't argued that they didn't use the technology covered by those patents (which is beyond dispute), only that HTC shouldn't have been awarded them.

    It's essentially the same with Samsung's case against Apple.

    If the courts finds that Apple infringed on even ONE of HTC's or Samsung's patents in either case, that is enough cause for a sales injunction to be placed on the iPhone 5, iPad 4 AND iPad Mini, with HTC's case covering the US and Samsung's case covering the European Union.

    Not only would this court loss result in a sales ban of Apple's two biggest selling and main product lines in their two most important markets, causing the company's revenue to halt to a virtual standstill and its AAPL share price to free fall at an unprecedented rate, but Apple would also be hit with a MASSIVE fine for damages to be paid out to HTC and/or Samsung likely to be in the BILLIONS while also being forced to pay CRIPPLING license fees for use of their wireless patents if Apple wanted the sale injunction lifted against the iPhone 5, iPad 4 and iPad Mini.

    If you ever wondered why Google never announced LTE in its new upcoming line of Nexus smartphones and tablets, well now you know the answer.

    Google knew all too well that HTC and Samsung, along with LG and Nokia, absolutely OWNED the LTE space with their huge combined number of wireless inventions and patents, and rightfully so.

    Google understood that they would have had to pay HUGE licensing fees for LTE that would have undermined their intent for Nexus being the most powerful AND affordable mobile devices on the market.

    Note that the Nexus 4 smartphone, which has a more powerful and faster CPU than the iPhone 5, DOUBLE the amount of RAM at 2GB, 4.7" screen rather than 4", HD resolution of 1280x768 allowing for the display of 720p content natively unlike the low-resolution display of iPhone 5 which can't even do HD, the use of Gorilla Glass 2 on its display and phone back versus Gorilla Glass 1 for iPhone 5, and wireless charging AND near field communication (NFC) which are absent on iPhone 5, will retail for just $299 WITHOUT needing a phone contract which is less than HALF the retail price of iPhone 5.

    That is UNLESS Google embraced the strategy of Apple, which is to completely IGNORE the LTE patents in existence belonging to other companies that cover the technology that Apple is using and skip out on any licensing payments ALTOGETHER.

    Apple is banking on the money they invest in defending themselves in the inevitable patent lawsuits PLUS any minimal settlements their lawyers were able to negotiate would amount to LESS than if they paid the licensing fees for the use of the patents to begin with.

    Google viewed this strategy as foolhardy and skipped out on LTE altogether. Now Apple is finding out the hard way that their "strategy" will likely backfire and all the legals fees they are already paying will be supplemented by the legal fee claims by HTC and Samsung, damages awarded to them in the BILLIONS for infringing on their patents, a sales injunction on the iPhone 5, iPad 4 and iPad Mini to boot, and an OUTRAGEOUS settlement and licensing deal dictated by HTC and Samsung for use of their patents so to allow Apple's main products to be sold in the US and the EU again.

    What's truly puzzling about Apple's "strategy" or corporate behavior is how on one hand, Apple is aggressively pursuing infringement claims against their competitors for questionable "design" patents, like the use of "rectangular device with rounded corners" and "home button", patents which are now being thrown out by the US Patent Office including those that were the basis of Apple's lawsuit against Samsung in the US and which now invalidate the verdict given Apple never should have been granted those patents in the first place, while on the other hand Apple is deliberately attempting to skip out on paying license fees for patents on "technology" owned by Motorola, HTC, Samsung and even VirnetX that Apple is ACTUALLY employing and rightfully should be paying license fees on.

    There seems to be a HUGE disconnect between Apple's self-assumed "moral" crusade for "enforcing patents" which nearly all are extremely questionable in nature and with regards to "design" and software "concepts" which are apparent to anyone with any remedial understanding of technology were in existence long before Apple made a patent claim on them, and Apple's utter refusal to acknowledge and pay for legitimate technology INVENTIONS patented by other companies despite Apple's pose and stance as "champions" of "defending innovation".

    So basically Apple believes that they and them alone have the "Jobs given right" to produce smartphones and tablets since they have patented or attempted to patent every basic and obvious "idea" or "concept" related to hand-held devices despite most of these "innovations" having been implemented in actual release products by Palm, Compaq, Mitsubishi, LG, Nokia, Creative and Samsung YEARS before the launch of the iPhone and iPad?

    And for which these companies didn't bother to patent their "innovations" since they all assumed these  ideas were so common, obvious and ubiquitous that it would be ridiculous to make claims of invention on them besides it being obviously morally WRONG and damaging to the industry and consumer freedom in the first place?

    And yet when Apple blatantly infringes and FLAUNTS not paying license fees on LEGITIMATE patents for technologies that they employ in their products, that somehow they're the VICTIM being bullied by patent holders and they shouldn't have to pay for technology invented by other companies despite being the most PROFITABLE company in the world by skirting corporate taxes around the world, exploiting child slave labor in the factories manufacturing Apple products, and gouging their customers with extremely over-priced, heavily marked-up and inferior and generations-old technology?

    Unfortunately for Apple, as they say, what comes around goes around.

    Apple thought that it could remain on top by patent trolling and forcing competitors out of the market through litigation and sales injunctions, spending more on legal than research and development, instead of simply offering the best and most cutting-edge products on the market as it once did.

    Apple decided that instead competing in the MARKETPLACE and offering superior products, that it could compete in the COURTROOM instead.

    Now Apple is getting a taste of its own "medicine", a toxic tonic that could end up achieving what even John Sculley and Gil Amelio could not.
  • Reply 18 of 49


     


     


    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.

  • Reply 19 of 49
    gatorguygatorguy Posts: 18,261member

    Quote:

    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/
  • Reply 20 of 49

    Quote:

    Originally Posted by Buckus Toothnai 

    post


    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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