Apple's FaceTime workarounds for VirnetX patent suit causing complaints, costs $2.4M per month

Posted:
in General Discussion edited September 2014
Modifications Apple has made to its FaceTime video calling service due to a lost patent lawsuit are reportedly causing complaints from customers, as well as a hefty $2.4 million per month fee for relay server costs.

FaceTime


Along with the $368 million Apple was ordered to pay software maker VirnetX for infringing on a VPN patent with FaceTime, the Cupertino company's workarounds are reportedly causing problems with the voice calling service, according to ArsTechnica.

In November of 2012, Apple lost a patent suit leveraged by VirnetX regarding its use of a certain virtual private network property in FaceTime, which is offered as a standard iOS app that ships with all iPhone, iPad and iPod touch devices.

Both companies are hashing out possible royalty payments and licensing issues, though not much has been reported on the proceedings as most relevant court documents are sealed. Instead, the publication spoke to a VirnetX investor named Jeff Lease who attended a recent royalty hearing earlier in August.

It should be noted that Lease is not a legal expert and has a vested interest in VirnetX, meaning his view of the facts may inadvertently be colored. Lease's statements are based on his notes which were taken at at the jury trial and post-trial hearings.

According to Lease, prior to the VirnetX case, a large percentage of FaceTime calls were facilitated through direct connections, with only 5 to 10 percent offloaded to relay servers. Because the VirnetX patent deals mainly with VPN connections, Apple began to route all FaceTime traffic through these relay servers to avoid paying ongoing licensing fees to the software company.

With the switch, Apple is now reportedly shelling out $2.4 million per month to the Internet content distribution companies that handle the routed calls. In addition, Apple reportedly fielded over 500,000 complaints since making the backend changes, thought to have gone live in April. The exact nature of the complaints was not revealed.

The new evidence, if true, could bolster VirnetX's assertions that its patents are vital to the communications industry and are therefore worth higher royalty rates. Specific numbers were not discussed at the August hearing, but Lease said VirnetX is looking for payments of over $700 million for FaceTime.

The judge overseeing the case has yet to make a decision regarding Apple's workarounds and what the company should or should not payout in royalties.
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Comments

  • Reply 1 of 107
    mdriftmeyermdriftmeyer Posts: 7,228member

    Quote:


    The new evidence, if true, could bolster VirnetX's assertions that its patents are vital to the communications industry and are therefore worth higher royalty rates. Specific numbers were not discussed at the August hearing, but Lease said VirnetX is looking for payments of over $700 million for FaceTime.



     


    Actually, the vital nature would reduce the value of the royalty, per license, not raise it.

  • Reply 2 of 107
    MacProMacPro Posts: 18,141member
    Buying and sitting on patents just to extort should be stopped.

    http://en.wikipedia.org/wiki/VirnetX
  • Reply 3 of 107


    Apple needs to pay the piper just like Scamsung should be paying Apple. The relay servers appear to be a workaround but is it really worth it? Maybe Apple should just buy throw a billion dollars at them and buy them out.

  • Reply 4 of 107
    These patent trolls need to be stopped.
  • Reply 5 of 107
    robin huberrobin huber Posts: 3,246member
    Used it several times this week with no problems.
  • Reply 6 of 107
    Now, if I used FaceTime and had problems, I know who to blame, and it won't be Telus (my provider) nor will it be Apple.
  • Reply 7 of 107
    tallest skiltallest skil Posts: 43,399member


    Yeah, it's causing complaints. The first complaint is that this company wasn't disbanded after losing the trial, because Apple did nothing wrong.

  • Reply 8 of 107
    Can Apple appeal of the judgment?
  • Reply 9 of 107
    fallenjtfallenjt Posts: 3,976member


    I use FaceTime at least a few hours everyday and I never had one problem for more than a year. It's weird that people complained about this free service. One thing I learn, FaceTime kills long distant phone business. I used to call my family idevices across the pacific and costed me a lot on phone cards every month. It's free now with FaceTime. Next, FaceTime Audio will kill a lot of provider calling plans because you can FT using 3G/4G. No more running out minutes every month.

  • Reply 10 of 107


    Care to back up that claim that Apple did nothing wrong with a set of facts. You are entitled to your own opinion but not your own facts....

  • Reply 11 of 107
    tallest skiltallest skil Posts: 43,399member

    Originally Posted by sapporobabyrtrns View Post


    Care to back up that claim that Apple did nothing wrong with a set of facts. You are entitled to your own opinion but not your own facts....


     


    I imagine all the original threads about this crap suit cover that nicely.

  • Reply 12 of 107

    Quote:

    Originally Posted by Tallest Skil View Post


     


    I imagine all the original threads about this crap suit cover that nicely.



    Beep, beep, beep... The sound of you obfuscating and backing up....  Never mind...  You can go back to sleep.

  • Reply 13 of 107
    tallest skiltallest skil Posts: 43,399member

    Originally Posted by sapporobabyrtrns View Post


    Beep, beep, beep... The sound of you obfuscating and backing up....  Never mind...  You can go back to sleep.


     


    Oh, shut up. You don't care enough to prove me wrong, don't bother posting. 

  • Reply 14 of 107
    gatorguygatorguy Posts: 20,274member
    ealvarez wrote: »
    Can Apple appeal of the judgment?
    I think they already made one appeal and the original judgement was upheld. There's been indications that Apple may not be done tho. They haven't posted the expense yet .

    But.....

    Virnet X has filed another Apple lawsuit against newer iDevices and using the same patent claims again.
  • Reply 15 of 107
    ash471ash471 Posts: 705member
    Buying and sitting on patents just to extort should be stopped.

    http://en.wikipedia.org/wiki/VirnetX
    While you are at it, force all raw land holders to develop their land or lose it.
    If we dug into this, I'll bet the original patent holders tried to license or sell and the industry told them to go pound sand.
    Also, who says they sat on the patent. FaceTime hasn't been around for very long and they are well into litigation, which takes years.
  • Reply 16 of 107


    If Tim wants to the livingroom for Apple tv, pay the royalty and settle.  Virnetx owns the patents. Five companies have already settled.  Tim be the gentleman with ethics and do the right thing for your customers and redeem the Apple experience.

  • Reply 17 of 107
    ash471ash471 Posts: 705member
    scotty321 wrote: »
    These patent trolls need to be stopped.
    You don't understand what a troll is. A troll sues on a patent that is probably not valid but settles for so little it isn't worth putting up the fight. The troll then sues many people to make lots of money.
    This case is no troll. The patent is clearly valid, clearly infringed, and Apple should clearly pay the patent owners fair value.
    Don't be two faced. When Apple sued Samsung we all cheered their win because it was just. Now that Apple is on the other side doesn't mean we should cheer for the innovator to get screwed.
  • Reply 18 of 107
    ash471ash471 Posts: 705member
    Yeah, it's causing complaints. The first complaint is that this company wasn't disbanded after losing the trial, because Apple did nothing wrong.
    You obviously don't understand patent law. If they infringe the patent than they owe damages. It doesn't matter if they did it innocently; if they infringe, they are infringers. There are very good reasons why the law works this way and it has served our country well for two hundred years. I dont think Apple or any of us should be advocating for mucking up the system just because we like Apple products.
  • Reply 19 of 107
    ash471ash471 Posts: 705member
    roy fiore wrote: »
    If Tim wants to the livingroom for Apple tv, pay the royalty and settle.  Virnetx owns the patents. Five companies have already settled.  Tim be the gentleman with ethics and do the right thing for your customers and redeem the Apple experience.
    Agreed. I suspect that is what Apple is doing. Tim still needs to put on his poker face and negotiate the best deal possible. Also, this will be a good reminder that Apple should be buying up these patents first. Obviously the patent was on sale to the highest bidder before the current plaintiffs got it. Apple should have bought it from the inventors instead of playing the "I dare you to sue me" game. Looks like they lost this round of the game.
  • Reply 20 of 107
    tallest skiltallest skil Posts: 43,399member

    Originally Posted by ash471 View Post


    If they infringe the patent than they owe damages. It doesn't matter if they did it innocently; if they infringe, they are infringers.


     


    My implication would be that they didn't infringe, not that infringement should go unpunished.

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