Apple ordered to pay $302.4M in damages to VirnetX in patent retrial

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A federal jury on Friday found Apple's FaceTime product in infringement of patents owned by non-practicing entity VirnetX, a decision that will cost Apple more than $302 million in damages.









The verdict was handed down by Judge Robert Schroeder, who presided over the case in the patent holder-friendly East Texas Federal District Court in Tyler, Texas, reports Reuters.



Apple's court battle with VirnetX dates back to 2010, when the NPE accused Apple and a handful of other companies of violating five patents covering virtual private networking. In 2011, VirnetX narrowed its target, accusing the iPhone 4S of infringing on a single VPN patent.



Apple was left on the hook for $368 million when it lost the iPhone 4S suit in 2012, but the ruling was vacated by the U.S. Court of Appeals for the Federal Circuit last September. A damages retrial in February combined the two VirnetX actions, with the jury finding in favor of the NPE and slapping Apple with a $625 million penalty.



VirnetX's celebration was short lived, however, as Schroeder tossed the $625 million award, saying repeated references to earlier cases likely confused jurors, leading to an unfair trial. As a result, a pair of retrials were ordered, one of which was decided today.
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Comments

  • Reply 1 of 29
    fallenjtfallenjt Posts: 3,836member
    Apple will appeal to a higher court. This is BS to let companies file non-practice patents to make money on deep pocket corporations like Apple....Patent Trolls need to get tossed and banned from suing.
    fotoformatnolamacguyksecmagman1979watto_cobrajbdragonbigjony0
  • Reply 2 of 29
    jdwjdw Posts: 602member
    US law needs to immediately change to prevent all "non practicing entities" from suing over patents.
    muadibenolamacguyksecmagman1979watto_cobraRobJenkbig
  • Reply 3 of 29
    Meanwhile, the Apple haters will be singing in the streets.
    As soon as I read 'East Texas' I knew that it would go badly for Apple. That juristiction needs to be wiped off the map IMHO. It adds nothing to human creativity.

    revenantnolamacguyksecmagman1979watto_cobraRobJenkbigjony0
  • Reply 4 of 29
    foggyhillfoggyhill Posts: 4,692member
    East Texas, home of sack shit Juries... This will be appealed, off course.
    magman1979big
  • Reply 5 of 29
    mdriftmeyermdriftmeyer Posts: 7,111member
    Conservative East Texas: the embodiment of Trumpism.
    nolamacguymagman1979montrosemacsbadmonkbigjony0
  • Reply 6 of 29
    adamcadamc Posts: 547member
    Conservative East Texas: the embodiment of Trumpism.
    Don't know why it reminded me of the French guy who went on a rampage smashing iPhones and Macs.
  • Reply 7 of 29
    What is the thing with those juries in that distinct? Rednecks.
    big
  • Reply 8 of 29
    nolamacguynolamacguy Posts: 4,758member
    fuck east texas and fuck software patents. as a career software dev, i see no reason ideas should be patentable rather than protecting implementation thru existing copyright law. that's how it works for other forms of written word. anybody can have the idea of a robotic superhero movie, but the dialogue in mine is mine. or another, nobody can patent the vague idea of a flying car, but if you build one your new hardware designs for an antigrav engine are yours. 
    ksecnostrathomasbadmonkbig
  • Reply 9 of 29
    jdw said:
    US law needs to immediately change to prevent all "non practicing entities" from suing over patents.

    Absolutely the worst idea ever.

    What you're essentially saying is if I invent something and patent it, that I'm no longer offered protection unless I start manufacturing. What's the point of a patent if anyone can use it freely because I'm not manufacturing anything?

    That would mean all independent "inventors" would no longer be protected since many of them would never have the resources to start manufacturing.

    Think of a chemist that comes up with a new material to make processor substrates. Intel starts using this idea to make all their chips. Guy goes to court and sues Intel, but it gets tossed out because he's a NPE. Guess he should have invested a billion dollars into his own fab so he no longer falls under the NPE label, right?

    Patents are assets. The holder can license it out, sell it to someone else or do nothing. It should be their choice, not the choice of another entity (Google, BTW, thinks that choice should be removed for some patents, but that's another discussion altogether).

    If the chemist above wants to license to Intel, Samsung and TSMC then that's his right. If he wants to sell it outright to Intel that's also his choice. If he's not sure of the value he can sell to a patent holding company and they can then shop it around for license fees (in this case the NPE is taking a gamble as they don't know the real value of the patent and if it will hold up in court).

    Im not upset at this win by VirnetX as they took their fight to court and won (they could have lost spectacularly if their patent had been invalidated). It's just a cost of doing business for Apple. It's to be expected that products as complex as an iPhone and iOS would be infringing a few patents somewhere. Apple would, of course, perform searches to see if ideas they're using are infringing, but you can't find everything.


    The only issue I have is with the district of East Texas. 
    sirlance99r2d2count-2rcfabirkosingularitygoodbyeranchmontrosemacsfreshmakertmay
  • Reply 10 of 29
    r2d2r2d2 Posts: 95member
    After 8 knee jerk reactions we finally get a reasoned post. Thanks ericthehalfbee!
    singularitygoodbyeranchfreshmakerbeowulfschmidtbigjony0adm1
  • Reply 11 of 29
    The problem with this case is multi-fold, aside from the venue.  Apple did indeed find prior art.  Their VPN implementation is all laid out in a paper by Kuichi:  https://www.isoc.org/isoc/conferences/ndss/96/ndss96/kiuchi.ps

    Together with workmen-like ideas expressed at the level of extant Internet RFCs, the ideas of
    security and anonymity were both "anticipated" by Kuichi and are garden-variety
    independent implementations of ideas obvious to cryptographers.
    This is not a truly novel idea like 2-key public crypto.

    Further, the government "expert agency" PTAB has already issued "final" invalidity decisions,
    although these are still subject to appeal, apparently.  So this is a case where parallel proceedings
    happen, one by district courts employing adversarial rhetoric to convince random non-technical juries, and the other allowing for the USPTO to overturn an overly-broad patent which they themselves issued based upon technical grounds.

    Also, the whopper monetary sums are based upon 2% of retail sales of the entire iPhone.
    So even though an iPhone contains implementation of literally hundreds if not thousands of ideas, one mistakenly issued patent can elicit an enormous effect.  Apple has been known to pay up to 1/2% of sales for entire portfolios of patents to the likes of Ericsson (for very basic cellphone technology), but are damned if they must pay even close to this amount for an a single already-deemed-invalid patent.

    The patent system is very broken.  It's a good racket to get the USPTO to temporarily approve some mere "improvement" idea (first-to-file) without citing relevant prior art.  How convenient. Then bamboozle a non-technical jury while the oversight obtains.
    edited October 2016 pacificfilmmontrosemacsjbdragonRobJenkbadmonkbig
  • Reply 12 of 29
    curt12curt12 Posts: 39member
    Didn't Apple once try to use East Texas to its advantage through the "Rockstar" shell company? http://arstechnica.com/tech-policy/2014/04/google-wins-a-game-of-escape-from-east-texas-linking-rockstar-to-apple/

    ""[T]he circumstances here strongly suggest that Rockstar formed MobileStar as a sham entity for the sole purpose of avoiding jurisdiction in all other fora except MobileStar’s state of incorporation (Delaware) and claimed principal place of business (Texas)," wrote Wilken. "A mere day before it initiated litigation against Google’s customers, Rockstar freshly minted MobileStar, with no California contacts, and assigned the asserted patents to that subsidiary." "
    edited October 2016
  • Reply 13 of 29
    count-2count-2 Posts: 1unconfirmed, member
    VirnetX has a product called Gabriel that implements their secure communications tech. It isn't selling because Apple has sniffled it by ignoring patent law.
    If you invent something, you are not a troll if someone else steals it and uses it and you sue them.
    Apple never saw an invention they could not steal cheaper than make...per SJ guru himself.
    They have been using VPNoD knowingly in violation for years. Their "engineers" testified they never even checked patents before development---sheer stupidity or arrogance. Trying to force Virnetx out of business. Bad stuff, Apple.
    Be smart. Buy VHX-VinetX stock now as Apple is going to pay and pay. And so is Samsung and others. Microsoft paid early and gets out cheap. Do some homework.
    freshmaker
  • Reply 14 of 29
    VirnetX, last I heard, uses their own "tunneling protocol" which Apple, nor Cisco, which was sued for the same thing, does not use.
    That the jury in the Cisco case came to the opposite conclusion speaks of the random nature of juries.

    As for engineers not checking patents before development, this is SOP upon advice of in-house attorneys, so as not
    to be "tainted" by other obvious ideas.   The independent re-invention which is rife in the software arena gets tripped up
    by Texas-style "winner-take-all".   You can't "steal" an idea which is not novel.  If the idea is a slight variation of prior art,
    using it "knowingly" is common sense, because it can't be "owned" unless some lottery ticket was won at the USPTO.
    But VirnetX has lost at the very same USPTO, won at the CAFC, and that is all, modulo appeals taking years, while technology marches on.
    edited October 2016 roundaboutnowbadmonkbig
  • Reply 15 of 29
    rcfarcfa Posts: 691member
    jdw said:
    US law needs to immediately change to prevent all "non practicing entities" from suing over patents.
    That's stupid. Imagine you're a chemistry student and you find a way to improve the efficiency of oil refineries that cost hundreds of millions to build. You patent your invention and Exxon rips you off: oh, but non practicing entities can't sue.
    That really your idea of justice?

    The problem isn't with non-practicing entities, it's with software patents in general, because software patents are somewhat a mixture between patenting ideas and patenting mathematical formulas,
    both of which aren't patentable.

    Software patents were an instrument of protectionism of the US software industry against foreign software developers; but now it bites them in the ass.

    Software patents are wrong, and in any case, too long lived for an industry with a technology half-life measured in months; software patents last as long as patents in industries which have development cycles measured in decades.
    jbdragonbeowulfschmidtdasanman69big
  • Reply 16 of 29
    Why is Apple the only company that gets singled out for these lawsuits? Are other cell phone companies like Samsung paying this patent holder?
    watto_cobrabadmonk
  • Reply 17 of 29
    dasanman69dasanman69 Posts: 12,950member
    Why is Apple the only company that gets singled out for these lawsuits? Are other cell phone companies like Samsung paying this patent holder?
    Does Samsung have their own video conferencing/chatting app? 
    freshmaker
  • Reply 18 of 29
    jdwjdw Posts: 602member
    jdw said:
    US law needs to immediately change to prevent all "non practicing entities" from suing over patents.

    Absolutely the worst idea ever.
    Im not upset at this...

    rcfa said:
    jdw said:
    US law needs to immediately change to prevent all "non practicing entities" from suing over patents.
    That's stupid. 
    The problem isn't with non-practicing entities...

    Two impassioned defenses of the status quo.  Neither offers any solution for the way things are, and one of you isn't even upset at the suit in question, recklessly calling it "the cost of doing business"!   Sounds like a lawyer or a would be lawyer or someone watching too many court centric shows on TV.

    Severely restricting patent lawsuits filed by non-practicing entities, while not without serious caveats, would indeed change the status quo in a profound way, but for the better.  I say give change a try for a while.  If that change doesn't work out for the greater good after several years, then make another change.  It's not like "change" must happen once and then never again.  But let's stop protecting the status quo of broken thinking, which makes it more costly to do business and financially rewards lawyers most of all in the end.  

    Stop fearing real change.  
    Start getting upset about frivolous lawsuits like this.
    Make a concerted effort to alter the status quo.
    If your efforts fail, rise up, dust yourself off, and try again.
    RobJenkbig
  • Reply 19 of 29
    crowleycrowley Posts: 5,430member
    jdw said:
    jdw said:
    US law needs to immediately change to prevent all "non practicing entities" from suing over patents.

    Absolutely the worst idea ever.
    Im not upset at this...

    rcfa said:
    jdw said:
    US law needs to immediately change to prevent all "non practicing entities" from suing over patents.
    That's stupid. 
    The problem isn't with non-practicing entities...

    Two impassioned defenses of the status quo.  Neither offers any solution for the way things are, and one of you isn't even upset at the suit in question, recklessly calling it "the cost of doing business"!   Sounds like a lawyer or a would be lawyer or someone watching too many court centric shows on TV.

    Severely restricting patent lawsuits filed by non-practicing entities, while not without serious caveats, would indeed change the status quo in a profound way, but for the better.  I say give change a try for a while.  If that change doesn't work out for the greater good after several years, then make another change.  It's not like "change" must happen once and then never again.  But let's stop protecting the status quo of broken thinking, which makes it more costly to do business and financially rewards lawyers most of all in the end.  

    Stop fearing real change.  
    Start getting upset about frivolous lawsuits like this.
    Make a concerted effort to alter the status quo.
    If your efforts fail, rise up, dust yourself off, and try again.
    5. Destroy research institutions.
  • Reply 20 of 29
    freerangefreerange Posts: 1,581member
    count-2 said:
    VirnetX has a product called Gabriel that implements their secure communications tech. It isn't selling because Apple has sniffled it by ignoring patent law.
    If you invent something, you are not a troll if someone else steals it and uses it and you sue them.
    Apple never saw an invention they could not steal cheaper than make...per SJ guru himself.
    They have been using VPNoD knowingly in violation for years. Their "engineers" testified they never even checked patents before development---sheer stupidity or arrogance. Trying to force Virnetx out of business. Bad stuff, Apple.
    Be smart. Buy VHX-VinetX stock now as Apple is going to pay and pay. And so is Samsung and others. Microsoft paid early and gets out cheap. Do some homework.
    Wow - must be either an employee or lawyer for VirnetX. What part of "the patents have been declared invalid" do you not understand? As to East Texas, there is one simple solution. Its time to give Texas back to its rightful owner - Mexico.
    dasanman69RobJenkwatto_cobrabadmonkbig
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