Apple isn't getting $454M back from VirnetX because it waited too long to ask
Apple won't be able to get back any of the $454 million it paid to VirnetX for infringing patents even after those patents were invalidated, a judge ruled on Tuesday.

Credit: Apple
In March, VirnetX confirmed that Apple sent a $454 million payment for infringing several of its patents through the FaceTime and VPN on Demand features. The payment capped a legal saga a decade in the making.
Apple was hoping to get some of that payment back, but U.S. District Judge Robert W. Schroeder III ruled on Tuesday that Apple unreasonably delayed its request to do so, according to a decision spotted by Law360.
The Federal Circuit in August 2019 reviewed several inter partes decisions, which ultimately left one and a half VirnetX patents invalidated. Apple then asked the Federal Circuit to allow those patent invalidations to be used in its district court proceedings. The Federal Circuit denied that request.
Apple then took the issue to the Supreme Court, filing a petition to challenge the Federal Circuit's decision and claiming that the Patent Trial and Appeal Board's decision should affect the district court ruling.
Just before the Supreme Court dismissed Apple's petition, the company filed the Rule 60(b) motion for relief from the judgement.
In his decision Tuesday, Judge Schroeder said that Apple waited too long to file a "strikingly" similar motion, adding that because "Apple drafted a substantively identical motion in six days, it did not need five months to reframe that motion as a request for relief under Rule 60(b)."
The judge was also unswayed by Apple's argument that it wanted to give the Supreme Court time to render a decision. He said that VirnetX could not have been prejudiced in this case, since it had already been paid.
"VirnetX's lack of prejudice cuts against a finding of untimeliness, but it does not outweigh Apple's failure to provide a colorable excuse for its delay," Judge Schroeder wrote in his order.
Although the saga concerning the $454 million is over, Apple and VirnetX are still in an ongoing battle over a second patent infringement case that was partially overturned in November and sent back to lower courts.

Credit: Apple
In March, VirnetX confirmed that Apple sent a $454 million payment for infringing several of its patents through the FaceTime and VPN on Demand features. The payment capped a legal saga a decade in the making.
Apple was hoping to get some of that payment back, but U.S. District Judge Robert W. Schroeder III ruled on Tuesday that Apple unreasonably delayed its request to do so, according to a decision spotted by Law360.
The Federal Circuit in August 2019 reviewed several inter partes decisions, which ultimately left one and a half VirnetX patents invalidated. Apple then asked the Federal Circuit to allow those patent invalidations to be used in its district court proceedings. The Federal Circuit denied that request.
Apple then took the issue to the Supreme Court, filing a petition to challenge the Federal Circuit's decision and claiming that the Patent Trial and Appeal Board's decision should affect the district court ruling.
Just before the Supreme Court dismissed Apple's petition, the company filed the Rule 60(b) motion for relief from the judgement.
In his decision Tuesday, Judge Schroeder said that Apple waited too long to file a "strikingly" similar motion, adding that because "Apple drafted a substantively identical motion in six days, it did not need five months to reframe that motion as a request for relief under Rule 60(b)."
The judge was also unswayed by Apple's argument that it wanted to give the Supreme Court time to render a decision. He said that VirnetX could not have been prejudiced in this case, since it had already been paid.
"VirnetX's lack of prejudice cuts against a finding of untimeliness, but it does not outweigh Apple's failure to provide a colorable excuse for its delay," Judge Schroeder wrote in his order.
Although the saga concerning the $454 million is over, Apple and VirnetX are still in an ongoing battle over a second patent infringement case that was partially overturned in November and sent back to lower courts.
Comments
in other words, a judge made Apple Pay HALF A BILLION dollars to an extortionist.
- simply because apples wording wasn’t good enough for him in the time they had to write and file?
So any legitimate patent holders will have to wait essentially forever for any royalties/damages.
Appeal filed the Rule 60(b) motion in the district court just prior to the Supreme Court's denial of cert, I would think, just to keep a door open in case it came up with something new to argue. That motion was almost certain to never be successful. So it effectively sat there until Apple found something new that it thought it could argue, but that something new wasn't really something new and had almost no chance of succeeding - and Apple surely knew that. This was a 1 in a 1000, what do we have to lose, attempt by Apple.
This wasn't an issue with slow paperwork. Apple was seeking to supplement its arguments for a (desperation) motion it had filed in February. What it sought to supplement its arguments with didn't happen until July. Apple couldn't have argued based on that supposedly new thing (decisions from the PTAB) until that supposedly new thing happened. In reality, it wasn't really a new thing - it didn't change what had already been decided by the Federal Circuit, and what the Supreme Court had already decided not to grant cert on.
THATS A TON OF NONEY.
There better be some written law that judge can point to.
so the frauds get to keep money that doesn’t belong to them???
and Apple gets to be stolen from?
this is twilight zone stuff.
I think the Federal Circuit was wrong in not giving effect to the PTAB invalidations (i.e. those which it had upheld) in the still ongoing infringement action. And I wish the Supreme Court had granted cert and provided some clarity on when such effect should be given - i.e., at what stage is an infringement action really over and thus future PTAB (upheld) invalidations don't matter.
That said, the Federal Circuit ruled as it did and the Supreme Court refused to hear the issue. So the matter was settled. Apple had essentially no chance to get the district court to rule in its favor on the Rule 60(b) motion. I don't think this decision by the district court that Apple's supplemental arguments are untimely really matters. Apple was almost certainly going to lose the motion anyway. There's nothing new here from a legal perspective.
Apple has been pretty successful in legal processes, particularly when it comes to IP issues. It loses some, but also wins some - quite a few. A lot of what happens in various legal processes isn't much paid attention to.
but if this wasn’t the way things are done, then there would be anarchy in the courts. Apple could have prepared this new request and handed it in earlier. They didnt have to wait. The judge could have decided whether they should have.
And very often, that’s exactly what happens.
For example in my state, you have six months to claim your Lotto winnings. A man missed it by one say and was denied several hundred thousand dollars. He took it up with the Lottery Commission who stood firm. No prize money for you! Some say it was the State being stingy, not wanting to pay. Sure to some or a large degree. But the commission said, if it's one day for this guy, it's two weeks for the next. Six months should be plenty.
From AI's article the judge said "you did the second request in 6 days, it shouldn't have taken 5 months for the first. Shame on you. (Ok, the last bit was me editorializing.)
Seems the judge said arbitrarily "the time limit is what I say it is" and maybe was more interested in teaching Apple a lesson instead of practicing objective juris prudence.
I would have like SCOTUS to hear the appeal so as to rule on what I understand, at this point, to be the arbitrariness of the judge's response.
Apple deserves to be held accountable for the mistakes it makes, but also not be held accountable for the ones it doesn't.