Apple Must Pay VirnetX $440 Million for Patent Infringement, Appeals Court Rules

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Apple must pay VirnetX $440 million after an appeals court upheld an earlier judgement in favor of the patent holding company, reports Reuters.

The U.S. Court of Appeals for the Federal Circuit today denied Apple's appeal of a 2016 verdict that awarded VirnetX $302 million, which increased to $439.7 million when taking into account damages and interest calculated during retrials.


VirnetX first sued Apple in 2010, accusing FaceTime of infringing on patents held by VirnetX. The two companies have been fighting in court since then, and Apple in 2017 said it would appeal the final $440 million judgement.

In a separate case that is also still unsettled, VirnetX was awarded an additional $502.6 million from Apple after a court found that Apple's FaceTime, iMessage, and VPN on Demand features infringe on four VirnetX patents related to communications security.

Apple in total owes VirnetX $942 million, but is likely to continue to fight both rulings, as the patents in question have been ruled invalid by a separate court. Apple said it is disappointed with the ruling and will once again appeal.

Article Link: Apple Must Pay VirnetX $440 Million for Patent Infringement, Appeals Court Rules
 

jav6454

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Too bad Apple can't just buy the company and fire everyone. Their market cap is less than the verdict.
I could very well be wrong, but such action would definitely raise one or two eyebrows at the S.E.C. and Justice Department. Basically hostile take over of a patent holding entity to make a trial go away.

Someone correct me if I'm wrong.
 

polaris20

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I could very well be wrong, but such action would definitely raise one or two eyebrows at the S.E.C. and Justice Department. Basically hostile take over of a patent holding entity to make a trial go away.

Someone correct me if I'm wrong.
You're probably right; I'm not a public trading/business rules guru, I'm an IT guy. That's why I said "too bad they can't" because I assumed it would be too good to be true.

I wouldn't advocate that as a great idea for nearly any situation, EXCEPT for friggin' patent trolls.
 

H2SO4

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Patent trolls....
So are Apple or anybody else holding on to and not using a patent makes them a troll, by the definition of most around here, (no doubt yourself included). They've patented 10's of thousands of things some ridiculously vague to stop others being able to do it.
They own the patent, pay them and use it. Wilfully infringing anyway just makes Apple a THEIF.
Cry, cry, cry but, but, Apple put in all the hard work and and......NO. In a lot of cases they bought a previous company that had done the work and filed the patent.
 
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NT1440

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So are Apple or anybody else holding on to and not using a patent makes them a troll, by the definition of most around here, (no doubt yourself included). They've patented 10's of thousands of things some ridiculously vague to stop others being able to do it.
They own the patent, pay them and use it. Wilfully infringing anyway just makes Apple a THEIF.
In a just world software couldn’t be patentable. I don’t think you were getting to that critique but that’s where your criticism of Apple “patenting just so others can’t use” (a tactic that is rampant in all industries) would naturally lead...
 

H2SO4

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Hey if they violated a patent and the actual originator of the patent sued and won I’d have no problem. That’s not what happened here. This company’s ENTIRE business model is patent suits, they have never produced a single thing they sue companies for. They just buy patents and sue, that’s a parasite.
Who cares. Do you think Apple have bought patents and actively use every single one?
 

H2SO4

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In a just world software couldn’t be patentable. I don’t think you were getting to that critique but that’s where your criticism of Apple “patenting just so others can’t use” (a tactic that is rampant in all industries) would naturally lead...
Whether others do it or not does not absolve them. If you file with the intention of not using or make your patent deliberately broad or vague when it doesn't need to be you are not being a 'sportsman'. You are really being dishonest. The problem arises because the degree is subject to how people view things.

What Apple do; Drive at 61 in a 60 and moan that someone else is doing 80. If you're speeding you're speeding, end of story.
 

Sasparilla

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The leadership of VirnetX (at least back when this lawsuit orginally started) was loaded with people from U.S. govt (NSA etc.)). They forced communications back through the server (from P2P), which it did at the time, and make money. I remember, back at the time, VirnetX wouldn't license its patent so P2P could continue.

Hopefully this gets knocked down again somehow.
 

NT1440

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Whether others do it or not does not absolve them. If you file with the intention of not using or make your patent deliberately broad or vague when it doesn't need to be you are not being a 'sportsman'. You are really being dishonest. The problem arises because the degree is subject to how people view things.

What Apple do; Drive at 61 in a 60 and moan that someone else is doing 80. If you're speeding you're speeding, end of story.
Go ahead and cite an example of this please.

As I said, this is a major problem in the patent regime we’ve constructed, but I’m wondering if you’re just yelling at windmills or actually having a substantial example to buttress your point?
 

az431

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Gotta love a system where patent trolls can exist and win absurd amount of money by simply purchasing patents.
May want to research the facts before making baseless comments.

These patents were not purchased by Virnet. They have always been owned by Virnet and are used in their own products. For example, https://patents.google.com/patent/US20040098485A1/en

Whether the patents are valid is a different issue for the courts to decide, but this isn't a case of someone simply buying a patent for the purpose of litigation (thought that isn't illegal anyway).
 
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NT1440

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Those same patents were available for Apple to purchase.
What does that have to do with my critique of the way our patent system works? Nothing. I suggest you read the thread because you’re barking up the wrong tree here.
 

Rudy69

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Apple said it is disappointed with the ruling and will once again appeal.
I don't agree with the ruling but I also don't agree that these court cases can be appealed over and over again
 
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az431

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In a just world software couldn’t be patentable. I don’t think you were getting to that critique but that’s where your criticism of Apple “patenting just so others can’t use” (a tactic that is rampant in all industries) would naturally lead...
FYI, software itself cannot be patented, but it can be copyrighted. The patents at issue here do not cover software. What can be patented are business methods incorporated into software, but the code itself is not patentable.

That said, how is preventing the patentability of software more just than allowing it?
 

dmylrea

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Hey if they violated a patent and the actual originator of the patent sued and won I’d have no problem. That’s not what happened here. This company’s ENTIRE business model is patent suits, they have never produced a single thing they sue companies for. They just buy patents and sue, that’s a parasite.
No it isn't. Apple used technology they didn't own the rights/patent to. Who cares who owns the patent now?
 

oneMadRssn

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Gotta love a system where patent trolls can exist and win absurd amount of money by simply purchasing patents.
Are we to just ignore the innovators who came up with those inventions and patented them? If enforcement companies can't win big money, then patents become worthless.
[doublepost=1547578647][/doublepost]
Hey if they violated a patent and the actual originator of the patent sued and won I’d have no problem. That’s not what happened here. This company’s ENTIRE business model is patent suits, they have never produced a single thing they sue companies for. They just buy patents and sue, that’s a parasite.
Private investor firms want to take a chance on startups, but they want some collateral in case it doesn't work out so they don't lose 100% of their money. Startups have no collateral, except IP. But IP is only worth something if it can be sold to an non-practicing entity if the startup fails.

If the startup fails, their IP is sold at bankruptcy to whoever wants to buy it. That money is used to pay back the investors so they can keep investing. Usually patent assertion entities buy the patents, and try to monetize them. If PAEs can't monetize patents, which you apparently have a problem with, then they won't buy the patents of bankrupt companies, which means those patents will be worth nothing, which means startups have no collateral, which means investors aren't as willing to take a chance.

It's all connected. The patent system props up a lot more than people realize.
 

chucker23n1

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Who cares. Do you think Apple have bought patents and actively use every single one?
No, they don't use every single one (nor would that be feasible). They do, however, use plenty of them, and produce plenty of working products, not just hypothetical shelved prototypes.

This is a case where everyone except for VirnetX loses:
  • Apple loses for obvious reasons
  • All of its competitors also lose: they're twice shy to make a similar product for fear of getting sued
  • The customer loses: ultimately, video conferencing products are worse
Were it not for this patent, FaceTime would be, as it originally was, a much better product with peer-to-peer connection.

It's even quite likely — given that Steve Jobs had promised it on stage — that we'd have other FaceTime-compatible video apps, because their format would be open.

Instead, Apple was forced to redesign FaceTime to use a centralized system that's less open and less efficient.
 

timborama

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No, they don't use every single one (nor would that be feasible). They do, however, use plenty of them, and produce plenty of working products, not just hypothetical shelved prototypes.

This is a case where everyone except for VirnetX loses:
  • Apple loses for obvious reasons
  • All of its competitors also lose: they're twice shy to make a similar product for fear of getting sued
  • The customer loses: ultimately, video conferencing products are worse
Were it not for this patent, FaceTime would be, as it originally was, a much better product with peer-to-peer connection.

It's even quite likely — given that Steve Jobs had promised it on stage — that we'd have other FaceTime-compatible video apps, because their format would be open.

Instead, Apple was forced to redesign FaceTime to use a centralized system that's less open and less efficient.
You’re absolutely correct. FaceTime reliability and quality has vastly detriorated since this suit. I constantly get connection issues, and black screens trying to FaceTime. Apple has tried to diagnose (reset, reboot, reinstall, different devices, routers, etc) but nothing worked, and they had no explanation. Almost certainly the issue is with Apples “new” backend.