Apple ordered to pay $302M in VirnetX patent case

Apple was ordered to pay VirnetX more than $302 million after a federal jury decided late Friday that the iPhone vendor infringed on two patents related to its FaceTime application. But the case isn't over yet.

The verdict stems from a case that began in 2010 when VirnetX claimed Apple infringed on four patents for virtual private networks (VPNs) and secure communications links. Apple was initially ordered to pay $368 million to VirnetX, but the suit was thrown out by a federal appeals court; then in 2012 a jury awarded $368 million in damages, but a federal appeals court partly overturned that verdict.

The two suits were combined, and a federal jury in Tyler, Texas, found in February that Apple had willfully infringed on the patents, awarding VirnetX a judgment for $625 million – more than the $532 million VirnetX had initially asked for. A federal judge threw out that ruling in August, however, saying jurors may have been confused by references to the earlier case.

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The latest damage amount in the latest order includes the amount Apple must pay for patents it had already been found to have infringed upon.

VirnetX is often derided as a patent troll that offers no products and generates most of its revenues through patent litigation. The firm, which was founded by former employees of a government contractor, has said its technology was developed out of work done for the CIA to make communications more secure, Bloomberg reported.

All four of VirnetX’s patents at issue in the Apple lawsuit were deemed invalid several weeks ago by the U.S. Patent and Trademark Office. But the patents remain valid and enforceable until all appeals reach a conclusion.

Neither company offered an immediate comment on Friday’s ruling, according to Reuters, but the case will now head to the U.S. Court of Appeals in the Federal Circuit in Washington, D.C., which specializes in patent law. That court will adjudicate it using both the patent office’s legal standard and the district court’s legal standard, Bloomberg noted, and VirnetX must clear both hurdles to ultimately claim its award.

The case is similar in some ways to BlackBerry’s patent showdown with NTP Inc. a decade ago. NTP’s patents were reexamined by the U.S. PTO, which took steps to overturn them, but NTP – which, like VirnetX was derided as a patent troll – promised to tie up the process for years with appeals. BlackBerry, facing a court-ordered shutdown of its service, ultimately paid NTP $612.5 million to settle the case.

For more:
- see this Reuters report

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