The US Supreme Court recently dealt a blow to Apple in a years-long Patent Infringement case over whether the tech giant infringed on another company’s patents or not. The Supreme Court refused to take into consideration Apple’s appeal to avoid paying somewhere around $440 million to VirnetX (a technology licensing company) corresponding to violations of its patents.
In its statement, VirnetX declared a “triumph” over Apple. Moreover, its shares increased to a great extent after the ruling and even closed up 12% on a day when the remaining market saw significant losses. On the other hand, Apple refused to comment on the Supreme Court’s decision.
Since 2010, VirnetX and Apple have been fighting in court when VirnetX filed a patent infringement lawsuit against the tech giant at the Eastern District Court of Texas for violating four of its patents with “VPN on Demand” and FaceTime applications on devices like the iPad and iPhone. The infringed patents involved methods for both enabling and securing real-time communications over the Internet.
VirnetX is a holding company based in Zephyr Cove, Nevada, which licenses patents for security technology. In its annual report of 2018, which is the most recent one available, the company stated that it owned 70 patents and Patent Applications in the US and further said that its Intellectual Property (IP) portfolio is the foundation of its business model. In the same year, VirnetX posted $63,000 in its annual revenue generated.
A Texas jury in 2016 ruled that Apple had infringed on the four patents and ordered a $302 million award for VirnetX (the award is now higher as a result of fees and interest added over the years). In 2019, the United States Appeals for the Federal Circuit in Washington upheld the same decision. Then, Apple went ahead with appealing at the Supreme Court and called the $440 million in damages as grossly excessive and even claimed that the award overemphasized the value of the patented technology. Apple also argued by saying that some of the patents at issue in the lawsuit filed were no longer valid, which left the company on the hook for hundreds of millions of dollars based on invalid claims. The tech giant even filed claims with the Patent Trial and Appeal Board by challenging the patentability of the technology involved in all the four VirnetX patents. The Board found that one of the four patents was invalid, and consequently, the other three remained in the appeals process.
Now, as the US Supreme Court has declined Apple’s appeal of the Patent Verdict, the patent infringement case shall be sent back to the Eastern District Court of Texas for the damages worth $440 million to be enforced.
In a statement, Kendall Larsen, the CEO at VirnetX, said that VirnetX was always in the right direction corresponding to its court actions against Apple. He also stated that VirnetX’s patented technology provided a critical security feature in a few Apple products, specifically the iPhone. Considering the utmost importance of internet security, he believes that the jury award is more than fair.
VirnetX and Apple are also involved in another ongoing legal patent battle, which deals with whether the redesigned versions of VPN on Demand and FaceTime still infringe on the same VirnetX patents or not. In this case, too, Apple has argued by saying that the patent claims are invalid.
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