Apple loses fight against patent troll, must pay $368 million to VirnetX for infringing on patents with FaceTime

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VirnetX, which calls itself a “patent holding company” (aka patent troll), sued a bunch of major corporations back in 2010 over infringement on VirnetX’s VPN-related patents. Microsoft settled with VirnetX in 2010 for $200 million. The fight between VirnetX and Cisco, Avaya, and Siemens, is still ongoing with trials schedule for later this year. And Apple has been slapped with a judgement to pay $368.2 million in damages.

VirnetX originally sought $708 million from Apple in damages for infringement upon VirnetX’s VPN-related patents that are “from work performed by [a former employee of] Science Applications International Corporation… for the U.S. Central Intelligence Agency to develop secure communications”. VirnetX asserted Apple violated VirnetX’s patents in various applications, including FaceTime which apparently makes use of VPN technology.

Last November a jury awarded VirnetX $368.2 million in damages; not quite the $708 million they were looking for but enough to make VirnetX one of the more successful patent trolls out there. Apple, of course, appealed the verdict and asked the judge either for a retrial or a decrease in damages; at the same time, VirnetX looked for an injunction against Apple products. Judge Leonard Davis, of Eastern District of Texas (a court notorious for favoring patent holders), denied requests of both and held up the damages awarded by the jury. On top of that, Judge Davis ordered Apple to come to a licensing agreement with VirnetX within 45 days and pay VirnetX $330,211 per day until that agreement is finalized.

I am not one for favoring patent trolls, but in the case of Apple I may make an exception. After all, what goes around, comes around.

[via ArsTechnica (1), (2), image via i.hoffman]

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4 comments

  1. Mike

    [@Ashraf] It seems to me that the inventor has every right to enforce his/her patent–and a very different situation from a stereotypical “troll” situation. That is, unless and until Congress passes a law that one can’t enforce a patent unless actively using the technology oneself.

    In passing, I note that companies, including “blue chips,” do this routinely–apply for patents, even though not using the technology. Both as a defensive and offensive legal matter. E.g. IBM, Apple, etc.

  2. Ashraf
    Author/Mr. Boss

    [@Tom] Apple actually isn’t a patent troll, not really anyway. They are more of a patent bully.

    [@Mike] This company was actually founded by the person who invented the technology. However, that doesn’t make them less of a troll.

  3. Mike

    And so what this case does is prove that the so-called “troll” was right: it purchased a patent from an inventor–who presumably got paid for his property–and then sued Apple for stepping on the rights it owned. All legit. and in full conformity with the law, until such a time, if any, that the law gets amended to provide that only someone who actually uses the invention that is patented may sue on it.

    As of now, that’s not the law, and this is no different than, in at least some circumstances, someone who bought land solely as an investment in Las Vegas before that city was developed, and then sold the land when its price had skyrocketed with the city’s development.