Apple ordered to pay VirnetX $503M for infringing patents

Posted:
in General Discussion edited October 2020
A federal jury on Friday calculated Apple owes VirnetX $502.8 million for infringing on the patent holdings company's intellectual property, the latest in a string of verdicts related to the serial filer.




The most recent verdict in Apple's long-running legal war with VirnetX was handed down by a jury hearing the case in the patent holder-friendly U.S. District Court for the Eastern District of Texas.

VirnetX is brandishing VPN on Demand IP, claiming Apple's FaceTime protocol infringed on the invention. The firm initially asked for $700 million, while Apple argued a more reasonable royalty rate of 19 cents per unit would produce $113 million, reports Bloomberg. The jury landed on 84 cents per unit, the report said.

Apple will appeal the decision.

"We thank the jury for their time and appreciate their consideration but are disappointed with the verdict and plan to appeal," an Apple spokesperson said in a statement to Bloomberg. "This case has been going on for over a decade, with patents that are unrelated to the core operations of our products and have been found to be invalid by the patent office. Cases like this only serve to stifle innovation and harm consumers."

Today's decision follows a partially successful appeal on the case's original $503 million ruling. Last year, the U.S. Court of Appeals for the Federal Circuit vacated infringement findings on two patents while upholding two others asserted against iPhone. The case was sent back to Texas.

In March, a separate and slightly different instance of the suit saw Apple pay VirnetX $454 million after a jury found the tech giant culpable for its FaceTime indiscretions.

VirnetX first filed against Apple in 2010, alleging infringement of four patents related to VPN on Demand technology. A federal jury initially ordered Apple to pay $625 million in 2016, but the decision was tossed out by a CAFC judge. That effectively split the case into two retrials, the results of which could cost Apple more than the original decision.
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Comments

  • Reply 1 of 22
    KTRKTR Posts: 280member
    Some might say the apple is looking is innovative ways?  They can't keep spending their money on lawsuits.  Just buy the damn company already.  lol.

  • Reply 2 of 22
    Unbelievable……VirnetX is a known serial offender ALWAYS litigating in TEXAS, where the accused always ALWAYS ALWAYS loses. No doubt Apple will win on appeal. Talk about a situation the Congress should be looking into that might actually fall under their purview, rather than badgering Tech companies with issues of which they have little or no understanding!
    killroyStrangeDayswatto_cobra
  • Reply 3 of 22
    Unbelievable……VirnetX is a known serial offender ALWAYS litigating in TEXAS, where the accused always ALWAYS ALWAYS loses. No doubt Apple will win on appeal. Talk about a situation the Congress should be looking into that might actually fall under their purview, rather than badgering Tech companies with issues of which they have little or no understanding!
    Oh NO, Congress are very very busy, just ask the Speaker of the House......
  • Reply 4 of 22
    Unbelievable……VirnetX is a known serial offender ALWAYS litigating in TEXAS, where the accused always ALWAYS ALWAYS loses. No doubt Apple will win on appeal. Talk about a situation the Congress should be looking into that might actually fall under their purview, rather than badgering Tech companies with issues of which they have little or no understanding!
    Not likely.  Why do you think Apple will fare better on this appeal than they've fared on all the other appeals?  Apple has been soundly trounced by VirnetX in multiple trials and appeals.  The cases have been going on for a decade and Apple still hasn't prevailed.  Back in March I said Apple is employing the Samsung defense of just appeal until everyone get's tired.  It's not working here because the verdicts keep getting worse.  You should probably look into the history of the cases before confidently proclaiming an Apple victory on appeal.
    gatorguyNotoriousDEVmuthuk_vanalingamFileMakerFeller
  • Reply 5 of 22
    flydogflydog Posts: 1,129member
    Unbelievable……VirnetX is a known serial offender ALWAYS litigating in TEXAS, where the accused always ALWAYS ALWAYS loses. No doubt Apple will win on appeal. Talk about a situation the Congress should be looking into that might actually fall under their purview, rather than badgering Tech companies with issues of which they have little or no understanding!
    Virnet owns a valid patent, and Apple infringed it.  Am I missing something?
    NotoriousDEV
  • Reply 6 of 22
    chasmchasm Posts: 3,382member
    flydog said:

    Virnet owns a valid patent, and Apple infringed it.  Am I missing something?
    Yes. Two things, actually:

    1, As referenced in Apple's statement regarding the verdict, at least some of the patents under question in this case have since been found invalid.

    2. I have yet to see any evidence in the filings that Apple actually infringed rather that "happened to come up with the same method." That's not to say none was presented, but I find it odd that no article I can find on the matter from any previous trial actually lays out Virnet's evidence that Apple knowingly infringed -- or that they were notified of this until years after the alleged infringement occurred. The fact that they have to file in the Eastern District of Texas undermines any claim they have that Apple willfully and with full knowledge infringed their patents.
    flyingdpbruce youngDogpersonradarthekatRayz2016jcs2305watto_cobra
  • Reply 7 of 22
    Unbelievable……VirnetX is a known serial offender ALWAYS litigating in TEXAS, where the accused always ALWAYS ALWAYS loses. No doubt Apple will win on appeal. Talk about a situation the Congress should be looking into that might actually fall under their purview, rather than badgering Tech companies with issues of which they have little or no understanding!
    Not likely.  Why do you think Apple will fare better on this appeal than they've fared on all the other appeals?  Apple has been soundly trounced by VirnetX in multiple trials and appeals.  The cases have been going on for a decade and Apple still hasn't prevailed.  Back in March I said Apple is employing the Samsung defense of just appeal until everyone get's tired.  It's not working here because the verdicts keep getting worse.  You should probably look into the history of the cases before confidently proclaiming an Apple victory on appeal.
    Not what happened in the Samsung case. Apple claimed that Samsung owed several billions in punitive damages AND at least $50 per unit in licensing fees AND import and sales bans on Samsung devices. (Really draconian stuff designed to force Samsung out of the market ... and far in excess of what Apple pays for the IP that THEY license.) Samsung said that they owed nothing. Apple filed suits in multiple countries all of which went through tons of appeals. Through all that no judge or jury at any time stated that Samsung owed a licensing fee at all. The amount of punitive damages Apple was awarded varied from ZERO to $880 million depending upon the jury or judge. No legal body at any time ever concluded that Apple was owed any more than a small fraction of what they initially sought and absolutely no one agreed to import bans or other measures that Apple sought while transparently trying to force Samsung out of the smartphone business.

    The idea that Samsung used stalling tactics until the issue became a moot point was just what Apple fans kept telling themselves until they convinced themselves that it was true. The reality is that Samsung came very close to not having to pay Apple a cent just like Microsoft never had to pay Apple a dime over Windows. The only thing that Apple got out of suing Samsung over their early pre-Galaxy S2 devices that didn't sell was a PR narrative with the media that has stuck ever since: that Samsung copies. Basically the media acts as if Apple won anything more than a moral victory over those years of lawsuits, and they actually ignore the many companies that actually do copy the iPhone, iPad and Macbook far more closely ... yet Apple never sues them because they know it won't accomplish the actual goal of ridding the marketplace of the meaningful competition that Android represents (we forget that Android had a tiny market share when Apple AND Microsoft began their lawsuits and threats against Samsung and other Android device makers) so why bother.

    HTC chose not to fight Apple in court and instead agreed to pay the licensing fees to Apple. Result: HTC, which was actually the leading Android phone maker before the Galaxy S2 changed the industry, is out of the smartphone business because paying Apple licensing fees left them with no money for the advertising and R&D necessary to compete. Samsung chose to fight it out and look at them now. HTC chose wrong. Had they fought, they would have wound up paying an even smaller pittance than Samsung did at most and very likely would not have had to pay anything at all.
  • Reply 8 of 22
    cloudguy said:
    Unbelievable……VirnetX is a known serial offender ALWAYS litigating in TEXAS, where the accused always ALWAYS ALWAYS loses. No doubt Apple will win on appeal. Talk about a situation the Congress should be looking into that might actually fall under their purview, rather than badgering Tech companies with issues of which they have little or no understanding!
    Not likely.  Why do you think Apple will fare better on this appeal than they've fared on all the other appeals?  Apple has been soundly trounced by VirnetX in multiple trials and appeals.  The cases have been going on for a decade and Apple still hasn't prevailed.  Back in March I said Apple is employing the Samsung defense of just appeal until everyone get's tired.  It's not working here because the verdicts keep getting worse.  You should probably look into the history of the cases before confidently proclaiming an Apple victory on appeal.
    Not what happened in the Samsung case. Apple claimed that Samsung owed several billions in punitive damages AND at least $50 per unit in licensing fees AND import and sales bans on Samsung devices. (Really draconian stuff designed to force Samsung out of the market ... and far in excess of what Apple pays for the IP that THEY license.) Samsung said that they owed nothing. Apple filed suits in multiple countries all of which went through tons of appeals. Through all that no judge or jury at any time stated that Samsung owed a licensing fee at all. The amount of punitive damages Apple was awarded varied from ZERO to $880 million depending upon the jury or judge. No legal body at any time ever concluded that Apple was owed any more than a small fraction of what they initially sought and absolutely no one agreed to import bans or other measures that Apple sought while transparently trying to force Samsung out of the smartphone business.

    The idea that Samsung used stalling tactics until the issue became a moot point was just what Apple fans kept telling themselves until they convinced themselves that it was true. The reality is that Samsung came very close to not having to pay Apple a cent just like Microsoft never had to pay Apple a dime over Windows. The only thing that Apple got out of suing Samsung over their early pre-Galaxy S2 devices that didn't sell was a PR narrative with the media that has stuck ever since: that Samsung copies. Basically the media acts as if Apple won anything more than a moral victory over those years of lawsuits, and they actually ignore the many companies that actually do copy the iPhone, iPad and Macbook far more closely ... yet Apple never sues them because they know it won't accomplish the actual goal of ridding the marketplace of the meaningful competition that Android represents (we forget that Android had a tiny market share when Apple AND Microsoft began their lawsuits and threats against Samsung and other Android device makers) so why bother.

    HTC chose not to fight Apple in court and instead agreed to pay the licensing fees to Apple. Result: HTC, which was actually the leading Android phone maker before the Galaxy S2 changed the industry, is out of the smartphone business because paying Apple licensing fees left them with no money for the advertising and R&D necessary to compete. Samsung chose to fight it out and look at them now. HTC chose wrong. Had they fought, they would have wound up paying an even smaller pittance than Samsung did at most and very likely would not have had to pay anything at all.
    Bud, walls of text really don't serve the purpose their authors think they do. ↑↑Perfect example↑↑ No one's reading that. Besides, you're rehashing well known history.  Most importantly you're rehashing well known history unnecessarily.  The Samsung quip was just a snide remark throwing a bit of shade at Apple for appealing 'til the cows come home.  Definitely not worth 3 paragraphs of keystrokes.

    In case you were wondering, the point of my post was Apple has been losing this case for decades and is unlikely to win on appeal as ThinkmanDuv claimed.
    bulk001muthuk_vanalingam
  • Reply 9 of 22
    bulk001bulk001 Posts: 770member
    I wondered where all the armchair lawyers were and was not disappointed to find them here! ߘ᦬t;br> (An Apple site that does not support Apple’s iPhone emoji’s?)
    edited October 2020 StrangeDayswatto_cobra
  • Reply 10 of 22
    fallenjtfallenjt Posts: 4,056member
    If you want to beat Apple, file a suit in Texas court. It’ll be overturned in higher court later.
    watto_cobra
  • Reply 11 of 22
    Clearly, VirnetX has a better legal team than Apple.
    watto_cobra
  • Reply 12 of 22
    Rayz2016Rayz2016 Posts: 6,957member
    Clearly, VirnetX has a better legal team than Apple.
    We’ve been saying that for years. Apple needs to hire some real sharks. 

    Is this patent the reason FaceTime never went cross-platform?
    killroywatto_cobra
  • Reply 13 of 22
    That’s not how patents work - first to file wins. Period, end of discussion. Why do you think Apple made the (in the eyes of the jury) lowball offer?  And the appeal
    certa would have gone the other way if invalidated patents pertaining to this specific cases were involved. 

    I’m no fan of NPEs - I’d love to see patents revoked if there’s no product in some amt of time (5 yrs seems reasonable).  But it’s cases like this that get Apple caught up in the ‘too big and powerful, must be broken up’ discussions. 

    chasm said:
    flydog said:

    Virnet owns a valid patent, and Apple infringed it.  Am I missing something?
    Yes. Two things, actually:

    1, As referenced in Apple's statement regarding the verdict, at least some of the patents under question in this case have since been found invalid.

    2. I have yet to see any evidence in the filings that Apple actually infringed rather that "happened to come up with the same method." That's not to say none was presented, but I find it odd that no article I can find on the matter from any previous trial actually lays out Virnet's evidence that Apple knowingly infringed -- or that they were notified of this until years after the alleged infringement occurred. The fact that they have to file in the Eastern District of Texas undermines any claim they have that Apple willfully and with full knowledge infringed their patents.

    killroywatto_cobra
  • Reply 14 of 22
    Jurors drawn from a small pool of people in one Texas county and that typically decide cases in favor of the patent trolls? Doesn't anyone find that a little odd? Seems like a blatant abuse of the justice system.
    killroyStrangeDayswatto_cobra
  • Reply 15 of 22
    geekmeegeekmee Posts: 633member
    $504 million, the cost of doing business in the smartphone industry.
  • Reply 16 of 22
    65026502 Posts: 380member
    That’s not how patents work - first to file wins. Period, end of discussion. Why do you think Apple made the (in the eyes of the jury) lowball offer?  And the appeal
    certa would have gone the other way if invalidated patents pertaining to this specific cases were involved. 

    I’m no fan of NPEs - I’d love to see patents revoked if there’s no product in some amt of time (5 yrs seems reasonable).  But it’s cases like this that get Apple caught up in the ‘too big and powerful, must be broken up’ discussions. 

    chasm said:
    flydog said:

    Virnet owns a valid patent, and Apple infringed it.  Am I missing something?
    Yes. Two things, actually:

    1, As referenced in Apple's statement regarding the verdict, at least some of the patents under question in this case have since been found invalid.

    2. I have yet to see any evidence in the filings that Apple actually infringed rather that "happened to come up with the same method." That's not to say none was presented, but I find it odd that no article I can find on the matter from any previous trial actually lays out Virnet's evidence that Apple knowingly infringed -- or that they were notified of this until years after the alleged infringement occurred. The fact that they have to file in the Eastern District of Texas undermines any claim they have that Apple willfully and with full knowledge infringed their patents.

    This is correct. "Happened to come up with the same method" is not a valid exemption. If they could prove it was made public before VirnetX submitted its application, they might have something to stand on with prior-art, but clearly they don't or would have made that case already.

    Intellectual property is property with value. Sometimes people come up with a great idea, patent it but don't have the means to put it into practice. It doesn't mean they shouldn't be able to reap the rewards and sell the rights to the patent. Apple needs to pay up and move on.
  • Reply 17 of 22
    killroykillroy Posts: 278member
    flydog said:
    Unbelievable……VirnetX is a known serial offender ALWAYS litigating in TEXAS, where the accused always ALWAYS ALWAYS loses. No doubt Apple will win on appeal. Talk about a situation the Congress should be looking into that might actually fall under their purview, rather than badgering Tech companies with issues of which they have little or no understanding!
    Virnet owns a valid patent, and Apple infringed it.  Am I missing something?

    This is like your copier can't send the copy by fax to anyone without paying me. That hit the fan some ago.
    edited November 2020 watto_cobra
  • Reply 18 of 22
    carnegiecarnegie Posts: 1,078member
    Unbelievable……VirnetX is a known serial offender ALWAYS litigating in TEXAS, where the accused always ALWAYS ALWAYS loses. No doubt Apple will win on appeal. Talk about a situation the Congress should be looking into that might actually fall under their purview, rather than badgering Tech companies with issues of which they have little or no understanding!
    Not likely.  Why do you think Apple will fare better on this appeal than they've fared on all the other appeals?  Apple has been soundly trounced by VirnetX in multiple trials and appeals.  The cases have been going on for a decade and Apple still hasn't prevailed.  Back in March I said Apple is employing the Samsung defense of just appeal until everyone get's tired.  It's not working here because the verdicts keep getting worse.  You should probably look into the history of the cases before confidently proclaiming an Apple victory on appeal.
    VirnetX has won on some issues in these cases, but so has Apple. For instance, the Federal Circuit overruled the infringement findings for two of the patents involved in this case. Apple and others have also had a lot of success in PTAB proceedings against VirnetX getting patent claims (including the three this judgment is based on) invalidated.

    Further, the damages award in this case didn't get worse for Apple it got better. It went from a royalty rate of $1.20 per unit to a royalty rate of $0.84 per unit.
    watto_cobra
  • Reply 19 of 22
    carnegiecarnegie Posts: 1,078member
    flydog said:
    Unbelievable……VirnetX is a known serial offender ALWAYS litigating in TEXAS, where the accused always ALWAYS ALWAYS loses. No doubt Apple will win on appeal. Talk about a situation the Congress should be looking into that might actually fall under their purview, rather than badgering Tech companies with issues of which they have little or no understanding!
    Virnet owns a valid patent, and Apple infringed it.  Am I missing something?
    Yes, it's a little more complicated than that. All of the patent claims which Apple was ultimately found to have infringed in this case have been invalidated by the PTAB.
    watto_cobra
  • Reply 20 of 22
    carnegiecarnegie Posts: 1,078member
    6502 said:
    That’s not how patents work - first to file wins. Period, end of discussion. Why do you think Apple made the (in the eyes of the jury) lowball offer?  And the appeal
    certa would have gone the other way if invalidated patents pertaining to this specific cases were involved. 

    I’m no fan of NPEs - I’d love to see patents revoked if there’s no product in some amt of time (5 yrs seems reasonable).  But it’s cases like this that get Apple caught up in the ‘too big and powerful, must be broken up’ discussions. 

    chasm said:
    flydog said:

    Virnet owns a valid patent, and Apple infringed it.  Am I missing something?
    Yes. Two things, actually:

    1, As referenced in Apple's statement regarding the verdict, at least some of the patents under question in this case have since been found invalid.

    2. I have yet to see any evidence in the filings that Apple actually infringed rather that "happened to come up with the same method." That's not to say none was presented, but I find it odd that no article I can find on the matter from any previous trial actually lays out Virnet's evidence that Apple knowingly infringed -- or that they were notified of this until years after the alleged infringement occurred. The fact that they have to file in the Eastern District of Texas undermines any claim they have that Apple willfully and with full knowledge infringed their patents.

    This is correct. "Happened to come up with the same method" is not a valid exemption. If they could prove it was made public before VirnetX submitted its application, they might have something to stand on with prior-art, but clearly they don't or would have made that case already.

    Intellectual property is property with value. Sometimes people come up with a great idea, patent it but don't have the means to put it into practice. It doesn't mean they shouldn't be able to reap the rewards and sell the rights to the patent. Apple needs to pay up and move on.
    Apple was precluded from making its invalidity arguments in this case.

    But, Apple and others have done just what you're suggesting (they haven't done) in other venues. Some of VirnetX's patent claims, to include all three that Apple was ultimately found to have infringed in this case, have been invalidated by the PTAB based on prior art. 
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