Apple Ordered to Pay $625 Million in VirnetX Patent Dispute

[MacBH928]

Just wondering...

when a company-like Apple- infringe on patents , do they do it on purpose and think they will get away with it?

 

[morcutt11]

apple do the same thing over patents, now everyone is gunning for them!

So, how much money should Apple be allowed to have? Have you called Tim Cook to let him know that you didn't approve Apple's business success and cash holdings? It is hard to believe that they haven't consulted you already...

 

[JimmyHook]

Good. Apple has too much money, anyway.

Who says? Why do you think you get to make that determination?

 

[69Mustang]

Talk about a "SlipperySlop"! How are you or anyone else qualified to decide who has "too much money" or what someone else should do with the money they earned within the constraints of our free market economy. Get off your high unicorn before someone decides how much money YOU should be allowed to have and what you can and can't do with it. I think you're in the wrong country, mate. Try China.

Calm down bud. You completely missed the fact Slop's post was sarcasm. Your clue? " They need to give at least 1/2 of it away. Some to charities. Lots to me."

Your unicorn seems to be a little higher than his.

 

[JimmyHook]

Apple was today found guilty of willfully infringing on four patents in an ongoing dispute with VirnetX and has been ordered to pay $625 million in damages, reports CNBC.

The patents in question relate to virtual private networking (VPN) protocols and in today's ruling, the jury decided that Apple's FaceTime and iMessages service, along with the iOS devices that support those services, infringe on VirnetX's intellectual property.

The patent dispute between Apple and VirnetX dates back to 2010, with a jury initially awarding VirnetX $368 million in 2012 after Apple was found guilty of infringing on VirnetX patents. That decision was thrown out in September of 2014 after the damages were found to have been incorrectly calculated, but a damages retrial that started last week led to the decision handed down this afternoon.

VirnetX originally requested $532 million in damages, an amount that grew to $625 million taking into account the willful infringement ruling.

Ahead of the jury's decision, CNBC says Apple filed a request asking U.S District Judge Robert Schroeder to declare a mistrial, accusing VirnetX of misleading and confusing the jury during its closing arguments. Schroeder has not yet made a ruling on the request.


Article Link: Apple Ordered to Pay $625 Million in VirnetX Patent Dispute

Apple should drag it out with appeals over every little bit of fine print over a decade or so just to make those idiots wait for their money. And most likely Appeals Courts would drastically reduce the damages, they usually do

 

[morcutt11]

Apple copying and stealing like usual. They're just as bad as Samsung.

Seriously? You understand that it is significantly more complex than that right? Maybe not, so I will explain:

Patent violations often come from 'independent discovery' - particularly in the case of patent trolls. Unlike Samsung, Apple didn't see a feature on a competing product and decide to copy it. Apple adding functionality to their phone that they felt was innovative and useful. It turns out someone had already thought of that functionality and patented it. The patent was then acquired by patent trolls - investors that gamble on the fact that a patent is worth paying for, based on future licensing and litigation related to its application in real-world products (since patent trolls don't actually use the patents for any products that they produce). Typically companies, like Apple, find out that they have infringed (or may have infringed - sometimes it isn't clear) on existing patents. At that time they typically try to license the patents for a reasonable fee. That is generally followed by them trying to find an alternate way to implement the desired functionality w/o using the patents (as Apple has now done). Occasionally, based on risk analysis that includes the level to which their functionality matches that which is already patented, the fees demanded from the patent troll for licensing, the time to market, the risk and potential damages stemming from litigation, etc. a judgement call is made to not license the patents or stop licensing them at some point, knowing that the issue may go to court.

So, to reiterate, this isn't "Apple copying and stealing like usual".

 

[69Mustang]

Apple should drag it out with appeals over every little bit of fine print over a decade or so just to make those idiots wait for their money. And most likely Appeals Courts would drastically reduce the damages, they usually do

That strategy didn't really work out too well for Apple in this case. The original award was $368 million in 2012. Apple got that thrown out in 2014. Virtnex asked for $532 million at retrial. They got $625 milllion. Dragging it out seems to be costing Apple more not less.

 

[morcutt11]

Just wondering...

when a company-like Apple- infringe on patents , do they do it on purpose and think they will get away with it?

It is part of a risk analysis (generally). See my post above. Sometimes a company doesn't know that they have violated a patent, but larger companies like Apple typically do as they have the resources to do the research. Once they realize that they have violated a patent (it is typically a mistake, made by 'independent discover'), they perform a risk analysis of the impact of the violation. They calculate out the likelihood of getting sued (very likely with a patent troll), the cost to license the patent (very high typically in the case a patent troll), the ability to develop a different process in the product that doesn't violated existing patents, margins on the product (they have to answer to investors after all, pay operating costs, etc.), etc. Thus there is a lot that goes into the decision to license an existing patent, but most companies will try to do the right thing and license the technology - particularly if the fee is reasonable. For smaller companies that are ignorant of the fact that they have violated a patent or don't have the strong margins on their products, it can be a different story.

 

[leroypants]

I think Nelson said it best.

 

[morcutt11]

Calm down bud. You completely missed the fact Slop's post was sarcasm. Your clue? " They need to give at least 1/2 of it away. Some to charities. Lots to me."

Your unicorn seems to be a little higher than his.

Was it sarcasm? The part about giving the money to him/her probably was (although who would turn it down right?) but comments like having limits on how much money a company can make sounds like socialism or liberalism run amuck.

 

[KazKam]

Calm down bud. You completely missed the fact Slop's post was sarcasm. Your clue? " They need to give at least 1/2 of it away. Some to charities. Lots to me."

Your unicorn seems to be a little higher than his.

I briefly considered it may have been sarcasm, but without a definitive indicator I also acknowledge that this is the same brand of self-entitled and bleeding-heart socialist rhetoric so many seem to be spouting in earnest these days.

 

[nt5672]

So if there is something apple has got a patent on (touch sensitive bezels isn't it?) We saw that one a few years back.
As they have patented it, but not used it.
Therefore I should be able to use that idea in the product I'm going to be selling very soon, as Apple are just sitting on it and not using it?

Yes?

Yes, that's it. The whole idea of patents was to eliminate competition while the creator earned back its investment. If there is no product then there is no need to limit competition because the patent creator is not recouping its investment anyway.

If the patent holder does create a product using the patent while it is still in effect and after someone else already has a product using the patent, then the someone else either pays, gets sued, or removes its product. Still a risky venture for the non-patent holder.

 

[69Mustang]

Was it sarcasm? The part about giving the money to him/her probably was (although who would turn it down right?) but comments like having limits on how much money a company can make sounds like socialism or liberalism run amuck.

Reading the comment in it's entirety makes it fairly obvious. Focusing on one single portion of it leads to failures of reading comprehension. At times we're all guilty of it. That's why Poe's Law is a thing. Conflating that comment with others to form an opinion about that specific comment is a logic fail.
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I briefly considered it may have been sarcasm, but without a definitive indicator I also acknowledge that this is the same brand of self-entitled and bleeding-heart socialist rhetoric so many seem to be spouting in earnest these days.

Seems as if we're in agreement your unicorn is definitely higher.

 

[AFEPPL]

So, how much money should Apple be allowed to have? Have you called Tim Cook to let him know that you didn't approve Apple's business success and cash holdings? It is hard to believe that they haven't consulted you already...

Think you must have missed quoted.
At no stage have i ever mentioned or commented on what to how much money ANY company should have.

Pls take care when making quotes like this.
Thanks and can you correctly edit the quote to point to the user you are meaning this comment for.

 

[dk001]

Patents should be valid only as long as the actual inventor is alive. They should be licensed-- in the case of virtual networks, as FRAND -- but not bought. They're meant to reward invention, not speculation and patent trolling.

So if you invent something and are granted a patent then I contract to remove you from this mortal coil that leaves your patent(s) free for anyone to use?
Wonder how companies will line item this on a development plan?
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A "patent troll" is generally defined as an entity that produces nothing and whose sole purpose is to extract licensing fees from companies that do.

In pejorative usage, a patent troll is a person or company that attempts to enforce patent rights against accused infringers far beyond the patent's actual value or contribution to the prior art. Patent trolls often do not manufacture products or supply services based upon the patents in question.

 

[jasonbogen]

I don't know enough about this particular case to have any opinion on whether Apple really was willfully infringing on an in-use patent (although the fact that the patent was for VPN protocols and the lawsuit targeted FaceTime is odd) or this is yet another patent troll front. Over half a billion dollars sounds awfully high for VPN patents in a video conferencing and messaging service that is given away for free as a bundle with a device, but who knows, maybe these patents really are that critical to what Apple is doing.

But either way, the entire landscape of software patents is utterly broken, and really, really needs to be fixed.

Look at the case of the A/V encoding scheme of the widely-used AVC/H.264 codec and container format; it has 662 patents involved in the US alone, and 4331 patents globally, with ownership spread across 44 companies and organizations ranging from Apple to Fujitsu to Columbia University. (Seriously--the entire list is in this 93-page PDF on the MPEG LA's website.)

Do you really think that every one of those 4331 patents is unique and not a software idea independently developed by some other developer or researcher earlier that just didn't go through the time and expense to patent it? That requiring 662 patents from 44 companies in a single country just for a good video encoding scheme is healthy for competition and innovation? That there isn't a single conceptual idea in H264 that isn't theoretically covered by somebody else's patent that just never noticed?

And that's just a single technology. Honestly, I would be genuinely impressed if you could come up with an algorithm that wasn't theoretically covered by some existing software patent.

The system is out of control and silly.

Very good post. Unfortunately most people can't comprehend this. Either that or they are either Apple haters or lovers who post out of blind ignorant emotion either way. The patent system is horribly abused to accomplish things outside of the intent of patents. In software engineering in particular. Things are able to be patented that, as you pointed out, are almost certainly covered in theory by existing patents or even standard computer science.

As for the difference between a company like Apple having patents they don't use and a patent toll doing the same, it is NIGHT AND DAY! Apple (or similar companies) will have those patents for products in development, products they may develop in the future or for just trying to cover themselves from all the insane patent trolls trying to make a buck of Apples products.

As for copying ideas, has Apple done it? Sure. Most famously the Xerox GUI. Difference between them and Samsung? Xerox was doing nothing with it and it was nowhere near developed enough to be a successful product. Furthermore, their leadership had no interest in marketing it. Apple took an idea that Xerox failed at and improved upon it to make it successful. Samsung takes successful ideas then copies them to the point of confusing consumers in order to steal market share. HUGE DIFFERENCE!

 

[tooltalk]

Apple really does have too much money. They need to give at least 1/2 of it away. Some to charities. Lots to me. There needs to be laws that limit how much money a person or company can have.

Apple should build an igloo or perhaps a ski resort right outside the courtroom in Marshall Texas. That would be a nice addition to Samsung's ice skating rink out there. /s

 

[dtlee1974]

So sad. If this company's sales were hurt by Apple's infringement, that's one thing, but they don't sell any products which is what makes this patent troll situation so criminal.

The patent system is clearly broken, but I feel like patent trolls is one aspect of it that can be addressed relatively easily... and should be addressed because they produce absolutely nothing and increase the cost of doing business which ultimately gets passed on to consumers.

So if I invent something and then don't have the capital to bring it to market but instead shop it around it is okay for a big company to steal it because I didn't "lose any sales"? Riiiiight.

By the way, this company appears to be owned by the actual inventors listed on the patent.

 

[tooltalk]

This is pocket change for AAPL. The question really is why didn't the plaintiff settle and agree with Apple who is known as an IP advocate and willing licensee in "most" cases? Will we ever know?

I suppose the bigger issue is if the winner is willing to take the cash offshore so AAPL doesn't have to pay double taxation to satisfy the judgement.

Apple is not known as a "willing licensee." As their lawsuits with companies small and big have shown they are litigation bully. Further, they are not necessarily advocating any IP reform in particular -- what they are pursuing is whatever works best for them, not for the sake of promoting innovation.

 

[Bawstun]

The best part about this was how when AAPL originally lost - to the sum of $300+ million, they appealed. Now it's doubled. LOVE when companies get even greedier and it backfires right into their wallet. That is justice. Congrats, VirnetX.

 

[tooltalk]

So sad. If this company's sales were hurt by Apple's infringement, that's one thing, but they don't sell any products which is what makes this patent troll situation so criminal.

The patent system is clearly broken, but I feel like patent trolls is one aspect of it that can be addressed relatively easily... and should be addressed because they produce absolutely nothing and increase the cost of doing business which ultimately gets passed on to consumers.

Sure. Apple sued Samsung for infringing on tablet designs that they never used in their products (and subsequently all thrown out by courts and PTOs around the world), but that didn't stop Apple from suing its competitor. so why the double-standard?

 

[Karma*Police]

So if I invent something and then don't have the capital to bring it to market but instead shop it around it is okay for a big company to steal it because I didn't "lose any sales"? Riiiiight.

By the way, this company appears to be owned by the actual inventors listed on the patent.

You don't need 20 years to shop it around.

 

[tooltalk]

Doesn't Apple have legal counsel that is well-versed in patent law that advises them of these existing patents ahead of time? I'm sure the answer is yes. So, is it a scenario where they're advised that a patent exists, told that it would probably cost them less than 1B if they got sued and lost, so they decide to infringe on the patent and take the risk?

Well, the problem here isn't that Apple counsel messed up. There are over 250,000 active patents in smartphones and it's simply impossible to keep track of all patents granted in the past 18 years. If Apple can sue their competitors for rounded-corners and disgorge competitor's entire profit (eg, Apple's design patents) and still collect damage award on invalidated patents (eg, Steve's touch patent which has been final-final-invalidated), it's doubly impossible to calculate and predict risk in fighting patent trolls.

Apple shouldn't complain as it's clearly part of the problem.

 

[bpeeps]

Good. Apple has too much money, anyway.

Hopefully at this point you've realized this was a ridiculously unintelligent comment to make.

 

[tooltalk]

I agree that patents are about promoting the public good, and I think those ends are achieved when patents have value. This value allows investors to make bets on start-ups, allows creditors to recoup losses in a bankruptcy, allows companies to trade and value innovations, and encourages engineers and scientists to try things in fields they are unfamiliar with or try things that have long odds of working out. All of this is possible when patents are valuable.

If a standard setting body (let's say IEEE for example) wants to set a standard, they should take their time to ensure their standard isn't infringing anyone else's patents. They certainly have the means and to do that - most of these standards spend many years in review. If they find a patent is infringed, then either license the patent or design around it. Remember this is all prospective, looking forward. If a standard is set, then there can be no patent by someone else on that standard later on, because the standard itself will be invalidating prior art. I don't feel bad for these organizations when they don't do their due diligence.

Patents shouldn't be encumbered by FRAND, which makes them a lot less valuable, without some affirmative action by the owner or inventor that makes that encumbrance fair. That encumbrance shouldn't ever be applied after the fact.

Also, almost everything can be deemed a public good worthy of promotion. If a farmer invents a new more efficient way of of picking wheat and patents it, should John Deere Tractors and Kubota Tractor just be able to make a "standardized" device that picks wheat that infringes the farmer's patent and pay the farmer only FRAND rates without the farmer having any input on the standard or the matter at all, citing the public good in cheaper food? The farmer has a right to say no, New Holland Tractors is willing to pay me more so you guys can't do this, f your standard. Or he has a right to say no, VirnetX is willing to buy my patent and try to make a deal with New Holland Tractors, also f your standard.

I don't understand why ppl here think FRAND patents are less valuable. They are usually first-class patents which allow inventors like Qualcomm, Ericsson, and many others to collect billions of royalties every year. Sure, the goals of FRAND, IEEE, and other standards are to promote industry-wide use, compatibility, etc, but affordability isn't necessarily the one they are mostly concerned with.
[doublepost=1454606646][/doublepost]

Awfully high?
Apple shipped over 1 billion devices with that functionality.

I think Apple stopped using the functionality claimed by VirnetX after the lawsuit began in 2010. So that's probably a lot fewer than 1 billion devices that actually infringed.

But I agree with your view that it's not given away for free. Facetime is an important integral part of the iPhone/iPad product lines that now account for much of Apple's revenue.