Judge throws out VirnetX's $625M patent judgment against Apple, demands retrial

apple store fifth avenue new york
Fifth Avenue Apple store in New York. Source: Apple

A federal judge threw out a judgment that would have forced Apple (NASDAQ: AAPL) to pay VirnetX more than $625 million after an East Texas jury ruled earlier this year that the iPhone maker had infringed on four patents.

A federal jury in Tyler, Texas, found in February that Apple willfully infringed on VirnetX's internet security technology without permission for features in its FaceTime and iMessage applications. The jury decided in VirnetX's favor in every patent claim at issue, and the award was actually more than the $532 million VirnetX had originally asked for.

But that ruling was thrown out in Tyler late Friday when federal Judge Robert Schroeder determined two VirnetX lawsuits had unfairly been argued in a single case. Jurors may have been confused by constant references to the earlier case, Schroeder determined.

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"While the Court allowed Apple I to be discussed through its rulings… the parties went well beyond what was appropriate and should not have referred to Apple I with such frequency," Schroeder wrote. "Although the Court was able to observe the jurors throughout the trial and is convinced that they made their best effort… the repeated references to Apple I, particularly those that were unnecessary, may well have prevented them from evaluating the evidence without improperly relying on the Apple I verdict."

Schroeder threw out the judgment and ordered that the cases be tried separately, with the first slated to begin Sept. 26.

VirnetX is often derided as a patent troll that offers no products and generates most of its revenues through patent litigation. It was awarded $368 million in a patent case against Apple in 2012 that included VirnetX's VPN technology, but that ruling was overturned on appeal.

The most recent case stemmed in part from the 2012 case. Shares of VirnetX fell nearly 44 percent Monday on news of the ruling.

For more:
- see this Reuters report
- read this ruling (PDF)

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