US Supreme Court upholds VirnetX's $439M patent win over Apple
Despite a last-minute argument from Apple that the judgment was "exceedingly unjust," the US Supreme Court has refused to allow a further appeal in the company's dispute with VirnetX.
FaceTime, an Apple technology at the center of some of VirnetX's patent infringement lawsuits
Justices in the US Supreme Court decided on Monday to refuse Apple an appeal over paying $439m to VirnetX in a patent dispute. Apple had maintained that it would be "exceedingly unjust" if the 2017 judgment was upheld, because it involves patents that have subsequently been invalidated.
Ahead of the Supreme Court's ruling, Apple's latest argument was that Rule 60(b) of the Federal Rules of Civil Procedure say that such a judgment cannot be brought in a patent case such as this.
"Rule 60(b) relief is appropriate to ensure that VirnetX cannot recover a massive damages judgment for patent claims that are necessarily unpatentable," said Apple's motion, according to a Law360 account of court filings last week..
The original judgment concerned Apple's infringing of patents belonging to VirnetX in software, including FaceTime and Messages, since 2010. Apple has previously maintained that this verdict is "legally wrong and grossly unfair."
Apple argued that FaceTime infringement should not be counted. "It would be exceedingly unjust for Apple to pay a judgment based on claims that never should have been issued in the first place," continues the new motion.
VirnetX disputes Apple's claims that certain patents have been invalidated, however.
Even if the infringing FaceTime components were discounted, VirnetX would still be owed for Apple's VPN On Demand products. In its latest appeal, Apple had asked for a new trial based only on the non-invalidated patents.
The Supreme Court was scheduled to begin considering the appeal on Friday, February 21, and Apple filed this latest motion only the day before. The company did so, it claimed, in order to "avoid burdening the court with a Rule 60(b) motion that would be unnecessary to resolve" if the appeal were granted.
Including both the original trial and the subsequent appeals, the case between Apple and VirnetX is based on a dispute that now dates back for a decade. It appeared to be resolved in VirnetX's favor in April 2018, when Apple was then ordered to pay $502.6m.
Neither Apple nor VirnetX have commented on the US Supreme Court's decision.
FaceTime, an Apple technology at the center of some of VirnetX's patent infringement lawsuits
Justices in the US Supreme Court decided on Monday to refuse Apple an appeal over paying $439m to VirnetX in a patent dispute. Apple had maintained that it would be "exceedingly unjust" if the 2017 judgment was upheld, because it involves patents that have subsequently been invalidated.
Ahead of the Supreme Court's ruling, Apple's latest argument was that Rule 60(b) of the Federal Rules of Civil Procedure say that such a judgment cannot be brought in a patent case such as this.
"Rule 60(b) relief is appropriate to ensure that VirnetX cannot recover a massive damages judgment for patent claims that are necessarily unpatentable," said Apple's motion, according to a Law360 account of court filings last week..
The original judgment concerned Apple's infringing of patents belonging to VirnetX in software, including FaceTime and Messages, since 2010. Apple has previously maintained that this verdict is "legally wrong and grossly unfair."
Apple argued that FaceTime infringement should not be counted. "It would be exceedingly unjust for Apple to pay a judgment based on claims that never should have been issued in the first place," continues the new motion.
VirnetX disputes Apple's claims that certain patents have been invalidated, however.
Even if the infringing FaceTime components were discounted, VirnetX would still be owed for Apple's VPN On Demand products. In its latest appeal, Apple had asked for a new trial based only on the non-invalidated patents.
The Supreme Court was scheduled to begin considering the appeal on Friday, February 21, and Apple filed this latest motion only the day before. The company did so, it claimed, in order to "avoid burdening the court with a Rule 60(b) motion that would be unnecessary to resolve" if the appeal were granted.
Including both the original trial and the subsequent appeals, the case between Apple and VirnetX is based on a dispute that now dates back for a decade. It appeared to be resolved in VirnetX's favor in April 2018, when Apple was then ordered to pay $502.6m.
Neither Apple nor VirnetX have commented on the US Supreme Court's decision.
Comments
Doesn’t this speak poorly of the patent system if large awards are possible through such means. Especially as we enter an era of more and more complex devices.
The fact that a patent holder can quietly stand by and wait until a patent is fully entrenched into a range of products is a total abuse of the meaning of patents, that’s not in any sense protection. Especially as the company itself never attempts to do anything else with the patents in question.
That's it. I'm patenting "brain to device communication" so I can sue everything in the future and maybe retroactively sue game consoles since you passively use your brain for input.
I know Apple does not want to give in to scams like this but in this case it is better to avoid future ligation with this company.
If this is not what billions of cash on hand is for I don't know what is.
I'm thinking of making a non-practicing company and write patents all day and wait for someone to acquire us or license our patents. $$$
That might be legal business but it’s not legitimate because it’s very far removed from the fundamental intention of patents.
Sometimes patents are roundly praised here on AI while other times they're ridiculed. Depends I suppose on who did the patenting?
Your example isn’t relevant here because these companies both make use of their patent portfolios to make products and thus move the industry forward. (I.E. the use of a public system to advance public interests.)
What I haven’t attempted to do is speak to the individual merits of the case - rather more broadly about the, perhaps unintended, consequences of not allowing recourse.
If there is a company in name only, there is remarkably little recourse even if the patents are invalidated upon review.
Edit: Also just have a thought about what it would mean if every patent held should be levied against all possible infringers - despite no evidence of damages.
Consider this too: a huge company like Apple or IBM or Google has almost unlimited resources to experiment and practice and play with ideas that end up behind patents and never used, which applies to most of 'em. Then along comes a small company or startup who actually plans to create a product using techniques that might be similar to the claims contained in an unused patent that Apple might own as an example. Is the intent of patents to be moving technology forward and useful to US industry and trade or to allow hoarding of worthy inventions and withhold them from any potential upstart or competitor and hinder technology?
ADDED - From VirnetX CEO today...
"We are extremely pleased with the Supreme Court's decision not to hear Apple's writ of certiorari," said Kendall Larsen , VirnetX CEO and President. "It has taken us 10 long years, 4 successful jury trials, 2 successful Appellate Court rulings and a favorable Supreme Court decision to get here. We believe in the fairness of the American justice system and have respectfully played by its rules no matter how arduous. We trust Apple will honor the decisions rendered by our courts and their esteemed judges and honor an agreement to abide by the court's decision."
"We are a small company with valuable security technology. The inventors of that technology have senior level positions at VirnetX. It has always been our objective to create our own products with our proprietary technology. Unfortunately, when other companies are using your technology without permission, you must take action to protect that company asset," continued Kendall Larsen . "We have always believed that we were in the right with our court actions against Apple. Four juries and countless judges agree. We believe that our technology provides an important security feature in some Apple products especially the iPhone. The jury award we received and confirmed by Federal judges, is less than a quarter of one percent of the cost of an iPhone. We believe this amount is more than fair considering the importance of Internet security."