Apple protests VirnetX patent loss that could cost over $1 billion

AppleInsider

Apple has asked a US District judge to reduce the amount of damages it is required to pay VirnetX over a patent infringement, and argues that new claims will mean it being required to pay over $1 billion.

Credit: Apple

Following losing a patent infringement case brought by VirnetX, Apple has ask US Direct Judge Robert W. Schroeder III to reduce the amount it is required to pay. The company's request came during a video hearing in which VirnetX lawyers asked the court to add on at least $116 million in interest.

VirnetX also asked that Apple be required to pay 84 cents in royalties for each device sold that infringes on its patent relating to FaceTime and VPN. That figure was previously decided by jury trial, but VirnetX wants it to now also apply to any future infringing Apple products, whether or not they were specified in the case.

According to Bloomberg, during this latest hearing, Apple asked instead that the total it is required to pay VirnetX be cut over 75% to $113 million in total. Apple's position is that the jury which ruled against them had not been told that two of VirnetX's patents had been rendered invalid by the US Patent Office.

Apple reportedly also argued that if there should be any future royalty fee at all, it should be 19 cents per unit.

Apple disputing the amount of damages owed is the latest in a decade-long case. VirnetX first sued Apple in 2010, accusing its FaceTime and VPN on Demand features of infringing on four patents.

VirnetX won the case in 2016, only for the decision to be overturned on appeal. A subsequent retrial again saw VirnetX win, and so have most of the following appeals.

Two of VirnetX's patents have since been been invalidated, prompting Apple in January 2020 to again appeal against the whole judgement.

In February 2020, that appeal was denied.

InspiredCode

I’m not sure what is left, but I don’t recall any of their patents something a reasonable person would consider IP. If this is how the patent system is going to work, we would be better off without it.

NotoriousDEV

Without knowing the details of the 4 patents and which 2 got thrown out, there’s not much to go on. 

Would like to see Apple use some of its resources and energy trying to affect positive change in the patent system (maybe work on Tech to assist the patent reviewers work in finding prior art) - instead of the SJW/Virtue Signaling. 

cloudguy

InspiredCode said:

I’m not sure what is left, but I don’t recall any of their patents something a reasonable person would consider IP. If this is how the patent system is going to work, we would be better off without it.

Apple's stance would be more sympathetic - and consistent - were they not so self serving with this. Apple tries to use a very broad interpretation of patent and trademark law when it comes to their own intellectual property but tries their level best to get away with a very narrow interpretation of the same when it comes to their having to pay to use others' IP. Apple's stance is the following:

Our IP is valuable because it is related to our brand so everyone else has to pay the maximum amount for it
Everyone else's IP is only valuable because it is used along with our own IP in our products so we should pay you very little for it and at times nothing.
We should not have to pay the same licensing terms as smaller companies who sell 1/100th as many products. That is punishing us for our success. Punishing us for making great products that people want to buy that incidentally contain your IP. So we should only have to pay you whatever [insert small electronics company that only sells a few million units a year] pays for the same IP because [small electronics company] shows its real value. If your IP was that valuable, [small electronics company] would sell 300 million units a year like we do. So this proves that your IP's only value is being fortunate enough to be in our product.

Yeah, stuff like that. It never ends. And that doesn't even get into Apple's willingness to break agreements at any time - or use strongarm tactics to force "renegotiations" - but will file a lawsuit at the drop of the hat against anyone who tries the same with them. In other words, Apple needs to abide by the patent system - and contracts system - that we already have before whining about the need for reform.

EsquireCats

You'd think that the patents being invalidated is a good reason to grant an appeal - after all it cements the defence's position that the inventions were not patentable nor valuable.

We'd also need a patent system where utter garbage isn't able to get a patent. The threshold is not just low, but comically low. The patent office shouldn't exist as a source of government revenue, and companies shouldn't need to patent every little idea possible as a defence - this only serves the patent troll business model.

ITGUYINSD

Apple can certainly afford the 84 cents per unit going forward -- look at the money they are saving by not including a charger or cable! No one thinks that the price of an iPhone was going to drop by the cost of the missing adapter and cable?

elijahg

ITGUYINSD said:

Apple can certainly afford the 84 cents per unit going forward -- look at the money they are saving by not including a charger or cable! No one thinks that the price of an iPhone was going to drop by the cost of the missing adapter and cable?

That was likely done to offset the increased cost from the 5G components, rather than affecting Cook's target profit margin.

SpamSandwich

InspiredCode said:

I’m not sure what is left, but I don’t recall any of their patents something a reasonable person would consider IP. If this is how the patent system is going to work, we would be better off without it.

That’s a ridiculously uninformed take.

docbburk

ITGUYINSD said:

Apple can certainly afford the 84 cents per unit going forward -- look at the money they are saving by not including a charger or cable! No one thinks that the price of an iPhone was going to drop by the cost of the missing adapter and cable?

This sounds exactly like something one of the patent troll lawyers would say.  They ask us to ignore 2 of the 4 patents, that were worth that 84 cents per unit, were thrown out.  They need to go back and assess the value of the 2 patents remaining and use that number, at least for any units made after the 2 patents were tossed.  

Someone argues that Apple wanted to pay less for use of IP, but ask everyone else to pay as much as possible. Most companies do this.  I know it doesn’t make it right.  The part that I find weird and that Apple fights against is that the companies want a percentage of the final price of the product Apple sells for the use of their IP.  So, they would pay more for IP used in an iPhone than LG would pay for the same IP used in an android phone.  I know it helps make the entry level androids even more affordable, but it if it’s the same IP, shouldn’t it cost the same for the use?  I think this principle is also part of why Amazon can sell their tablets at low prices to get you do buy more of everything from Amazon. Apple Pay’s more for the same IP because they make a higher quality device.  Does any other industry do this? I’m asking because I really am not sure.