Apple ordered to pay $440M to VirnetX

Yolanda Curtis
October 17, 2017

Although Apple initially lost the suit and filed for a mistrial, it won a new trial, lost another and was ultimately ordered to pay around $300 million in a complicated series of suits.

Of course, after seven years of legal feuds, Apple is more than willing to take the case to the Court of Appeals in search of some sort of remedy that leaves them off the hook. In its latest ruling, the court granted all of Virnetx's motions and increased the royalty rate for a period of willful infringement by 50 percent, from Dollars 1.20 to USD 1.80 per device.

VirnetX has won three separate jury trials against Apple, all in the Eastern District of Texas, a longtime hotspot for patent-holding companies seeking to sue tech companies. An Eastern District of Texas court has denied all of Apple's motions to end the case in a non-infringement ruling or retrial, leaving the tech giant with a final judgment that orders it to pay VirnetX $439.7 million.

This includes $1.80 per infringing iPhone, an increase of 50% from the original ruling.

US$440 million might not be a huge amount for Apple and the money involved is certainly not the reason behind Apple's effort to appeal against the judgement.

"This is the third time a jury has ruled in our favour against Apple", said Larsen. A third trial, in September 2016, resulted in a $302 million verdict, which is what the judge added to in his recent judgment.

"The cost of our security technology in infringing devices has been apportioned and is less than a quarter of 1% of the device's cost".

According to commentators, it is more about the principle rather than the money for Apple.

The judgment could still raise concerns for companies affected by other VirnetX-held patents, as it might set a higher bar for payouts in future cases.

The first issue of patent warfare between two firms since years has been company's integration into IOS operating system, such as FaceTime and imessage.

Apple's continued infringement after the first verdict in 2012 could not be justified and therefore must be considered wilful. But VirnetX's SEC filings show that Gabriel doesn't earn any revenue at all.

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