Apple on the hook for $439.7 million to VirnetX over FaceTime should appeals, patent inval...

in iPhone
A series of motions by Apple in court challenging the validity of a ruling in favor of patent aggregator VirnetX have been denied, with Apple facing a $439.7 million dollar penalty -- but there are still appeals of judgements to be made, as well as the conclusion of a patent invalidation process which may wipe the slate clean.

On Monday, the United States District Court for the Eastern District of Texas ruled against all of Apple's motions filed as a result of the retrial. The motions that were denied were a motion for judgment as a matter of law of non-infringement, a motion for judgment as a matter of law on damages, a motion for a new trial on infringement, and a motion for a new trial on damages.

As a result, a final judgement amount of $302.4 million as decreed by a jury, a $41.3 million willful infringement penalty, and attorney fees of $96 million are all on the dockets. However, Apple confirmed to TechCrunch that it plans to appeal the judgements on the motions themselves.

Additionally, all of VirnetX's patents have been invalidated -- with an appeal ongoing by VirnetX. The patents are technically still valid until all of VirnetX's appeals are exhausted, and there is no certainty that the patent invalidation will survive the appeal process. However, should the invalidation be confirmed, then Apple owes nothing.

VirnetX is mostly a patent aggregation company, with a single communications platform it launched in 2014, years after the litigation with Apple began. The VirnetX Gabriel small- and medium-sized business collaboration suite has seen few updates since the April 2014 update and December 2014 widening of the pre-release program.

The first trial found Apple's VPN on Demand feature, used in iOS 3 through iOS 6, in infringement of a pair of VirnetX patents. In addition, Apple was found to have willfully infringed on the patent portfolio with FaceTime, iMessage, and VPN on Demand implementations during the second trial.

Both verdicts were ultimately rejected on appeal in September 2015. The U.S. Court of Appeals for the Federal Circuit called for a damages retrial.

After a week, the retrial jury in East Texas Federal District Court made a unanimous decision against Apple's FaceTime, iMessage and VPN services use, as well as the devices running them, finding each in infringement of VirnetX intellectual property. VirnetX was awarded $625 million as a result. Apple immediately appealed the decision, leading to a retrial order in July 2016.

In Sept. 2016, a federal jury found FaceTime infringed upon VirnetX patents, and awarded the aggregator $302 million. If upheld, it would be the second major victory regarding telecommuncations patents, with the company having squeezed $223 million from Microsoft across two rulings regarding Skype in 2010 and 2014.


  • Reply 1 of 8
    "..and attorney fees of $96 million" I'm in the wrong job.
  • Reply 2 of 8
    emig647emig647 Posts: 2,454member
    I get they have an app, but they don't utilize these technologies. Also going through Eastern Texas is extremely suspect to me. 

    Austin Meyers (originator of X-Plane) took a trip there to illustrate how corrupt this system is:
    The Patent Scam Intro
  • Reply 3 of 8
    RacerhomieXRacerhomieX Posts: 95unconfirmed, member
    I think VirnetX is full of it.
    I hope Apple sues them out of existence.
  • Reply 4 of 8
    jbdragonjbdragon Posts: 2,288member
    I think VirnetX is full of it.
    I hope Apple sues them out of existence.
    If you have to file your case in East Texas Federal District Court, you really don't have crap to stand on and they must be worthless patents. Apple in the end will win outside that court. If anything, this case should have been filed and heard in California where Apple is located. Where is VIRNETX located? Looking, they seem to be located in Nevada. So they should have at least had to take their case to the Nevada Courts, Not the East Texas District Court where it seems every one of these Patent cases ends up at with them winning where as everywhere else they end up losing.
  • Reply 5 of 8
    It's a rather "interesting" (read dysfunctional) system that allows for treble-damages
    by non-technical juries [guided adversarialy by ten-gallon-hat lawyers and judges] *at the same time*
    that the parallel system (of PTAB, staffed by USPTO subject experts trying to get rid of
    overly-broad patents rubber-stamped by their lower-level staff) has determined invalidity.
    Yes, "determined" is seemingly never-final because of the years-long appeal process
    in either system.   Will the Supremes in the Oil States case break this tie?
  • Reply 6 of 8
    "..and attorney fees of $96 million" I'm in the wrong job.
    THIS is why lawyers love patent cases...
  • Reply 7 of 8
    Apple should hold out. VirnetX's patents may (will likely) be ruled invalid. Scratch that ... they have already been ruled invalid VirnetX is appealing. But the judges in this case aren't allowed to consider that. While the patent invalid ruling is being appealed, the judges have to treat the patents as if they were valid. VirnetX is hoping for a final judgment against Apple before the final judgment against them occurs. Meaning that even if their patents are been ruled invalid later, Apple would still have to pay because VirnetX held the patents at the time that the final ruling was issued. So ... Apple should do whatever they can in order to keep this lawsuit alive until the clock runs out on VirnetX's patents. As when the clock strikes midnight, VirnetX will automatically forfeit any pending judgment concerning patents that they don't own anymore.
    edited October 2017
  • Reply 8 of 8
    "..and attorney fees of $96 million" I'm in the wrong job.
    THIS is why lawyers love patent cases...
    Correction: "THIS is why lawyers love to sue Apple..."
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