The Judge has a conflict with VirnetX. This will be tossed. It will start again, and we will discuss this in 2021.
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Apple Ordered to Pay $625 Million in VirnetX Patent Dispute
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The Judge has a conflict with VirnetX. This will be tossed. It will start again, and we will discuss this in 2021.
The people complaining about patents in this thread are really quite clueless as to just how hard it is to get to an issuance, and just how hard it is to get what you originally applied for to be covered wholly. Then, even after you get a narrowly tailored patent after spending tens to hundreds of thousands of dollars, and years, on prosecution, YOU, as the patent owner must enforce your own patent. No one pays for your legal fees to sue someone. Not many law firms are going to take you on a contingency basis. You want to sue Apple, Google, etc.? You better get a few million dollars ready.
This is why most patents secured by individual inventors are sold off to other firms: people simply run out of money and hope.
Of course that all pertains to individual inventors. The real problem lies within large multinationals like Apple and Google who have dedicated legal teams that are patenting 24/7. Those companies really are the ones that are ruining the patent space, and comprise most of the patents out there. But now they have caught themselves up in a patenting marathon to protect themselves from lawsuits from their rivals: i.e. you build a large portfolio so that if someone sues you, you look to your portfolio and say "hey, you are infringing on this patent, which I own. Drop your suit."
The patent office is already very very hard on software patents. Most of the "frivolous" patents you are hearing about are from years ago, possibly from the first tech bubble. And therein lies another problem: people are evaluating these patents based on hindsight: "ohhh, that's so obvious." Yes, it is obvious now, because everyone uses the tech now. It was not obvious when it was invented, when the patent was applied for, and approved. There is actually a statute on obviousness, and the patent office even tries to use MULTIPLE patents (sometimes separated by years) to invalidate your patent/application. i.e. They take a patent from 1999, combine it with a patent from 2005, and say your patent is invalid not because either one by itself invalidates your patent, but when you COMBINE them your patent because "obvious."
So for those complaining about patents, please provide concrete criticism and concrete constructive feedback. Don't just whine about how the patent system sucks, and how it needs reform. How do you want to reform it? Stop liquidity (i.e. prevent sales of patents to third party firms)? Require people to use the invention before the file a lawsuit?
Also, please don't misuse the word "troll". You have to realize that a lot of inventors and individuals are left with no choice but to liquidate their assets because they are out of money.
This is why most patents secured by individual inventors are sold off to other firms: people simply run out of money and hope.
Of course that all pertains to individual inventors. The real problem lies within large multinationals like Apple and Google who have dedicated legal teams that are patenting 24/7. Those companies really are the ones that are ruining the patent space, and comprise most of the patents out there. But now they have caught themselves up in a patenting marathon to protect themselves from lawsuits from their rivals: i.e. you build a large portfolio so that if someone sues you, you look to your portfolio and say "hey, you are infringing on this patent, which I own. Drop your suit."
The patent office is already very very hard on software patents. Most of the "frivolous" patents you are hearing about are from years ago, possibly from the first tech bubble. And therein lies another problem: people are evaluating these patents based on hindsight: "ohhh, that's so obvious." Yes, it is obvious now, because everyone uses the tech now. It was not obvious when it was invented, when the patent was applied for, and approved. There is actually a statute on obviousness, and the patent office even tries to use MULTIPLE patents (sometimes separated by years) to invalidate your patent/application. i.e. They take a patent from 1999, combine it with a patent from 2005, and say your patent is invalid not because either one by itself invalidates your patent, but when you COMBINE them your patent because "obvious."
So for those complaining about patents, please provide concrete criticism and concrete constructive feedback. Don't just whine about how the patent system sucks, and how it needs reform. How do you want to reform it? Stop liquidity (i.e. prevent sales of patents to third party firms)? Require people to use the invention before the file a lawsuit?
Also, please don't misuse the word "troll". You have to realize that a lot of inventors and individuals are left with no choice but to liquidate their assets because they are out of money.
What you described was simply an NPE, not necessarily one that engages in troll-ish practices
The founders and chief officers of VirnetX are two of the inventors of all the patents in question.
They have a right to profit from their work, and to sue if someone refuses to license them.
Since it's software, their patents and related code libraries ARE their products. No factory needed.
It's not just them. Lawyers always sue where they think they have an advantage.
That's why Motorola liked to use Illinois courts, and why Apple prefers using a California district.
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It's not all Texas courts. It's just East Texas courts.
https://www.eff.org/deeplinks/2014/07/why-do-patent-trolls-go-texas-its-not-bbq
Apple needs all of that money until they find the next big thing to keep their lights on. The iPhone did a great job the past few years, but now that we've possibly reached peak iPhone, peak smartphone...
It's actually somewhat less than a billion, since early iDevices aren't compatible with the current incarnation of FaceTime or Messages, but the number is still very high. Let's say roughly 700 million devices, or a dollar per device.
And as I said, this may be reasonable. But given that FaceTime and Messages are only two of the thousands of things that iPhones are used for, and that these patents relate explicitly to the secure transport protocols used in those technologies (which are of interest to the privacy-conscious, but most users aren't even aware of), and just in relative proportion to other patented technologies involved, a dollar a device seems quite high to me.
Think of it this way: FaceTime uses H.264/AVC encoding (you can find it mentioned in the software license agreement). As I pointed out, in the US alone there are well over 600 patents involved in just the video used to encode FaceTime. There are, presumably, other patented things involved in the transport protocol, the display, the UI, focusing the camera, light level detection, noise rejection, etc.
So looking only at FaceTime, if you take the four VirnetX patents to be worth 50 cents per device, or around 12 cents per patent per device, then the 650 other patents (a few are already Apple's) involved in encoding and decoding the video, if licensed at that same 12 cents each, would cost $80 per phone.
Now, patent licensing doesn't work that way, but my point is that unless these four patents were incredibly integral to the functioning of FaceTime and Messages, a buck a device seems high given the absurd number of other software patents involved in the device.
Of course, if it's willful infringement, the damages can be punitive, in which case high numbers are quite intentional.
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A clarification - one does pay taxes for civil court judgment awards that are collected or settlements that are collected upon. One pays no taxes on civil court judgment awards related to personal injury-related cases that are collected upon. See IRS Publication 4345.
I've won several judgments and also settled cases each year for the past 7 calendar years - I've had to pay taxes on every single one of them, and am also entitled to deduct court costs and attorney's fees, but only the court costs and attorney's fees incurred in the calendar year of the judgment collection.
I didn't quote you and I didn't quote what was listed there. I have no idea why it is showing up the way it is. I quoted something else from someone else entirely...
I need to recheck, so don't take this as gospel, but I read somewhere that it was $1.67 per each of 370 million devices. Of that, about 40% was penalties for willful infringement, including Apple's claimed workaround method.
IIRC, VirnetX is suing separately for other iDevice models, which means the total award could end up being over a billion dollars.
At first glance it does seem high for just four patents, even if they were very important to Apple.
Of course, Apple's lawyers are quite familiar with such pricing, considering what they were demanding for some patents of their own. For example:
During the last 2014 Apple v Samsung trial, Apple wanted at least $2.75 per product infringing the data-tapping patent, $2.30 for the autocomplete patent, and $1.41 for the slide-to-unlock patent. That would be a minimum total of $6.46 per unit for just three patents, all of which have valid workarounds.
Compared to Apple's pricing, VirnetX's original request for ~$1.25 for four patents looks cheap.
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This exactly. I would also say that Facetime's functionality is more integral to OS and a "selling" point of the iPhone vs slide to unlock.
So basically you are saying companies do infringe on patents sometimes and hope to get away with it?
Umm - yes. Again, it is part of a risk-based analysis and you have to take into account that not all companies have deep pockets and/or the 'moral fiber' to do the right thing and properly license technology. Just think of how many companies out there that haven't licensed all of the software that they use properly. Sometimes the volume licensing agreements are so convoluted that companies may incorrectly license the software by accident, but other times they are simply electing a 'more economical' approach, knowing that they likely won't get caught (until they fire a disgruntle IT guy that reports them).
Patent infringements also often arise because some company managed to get a patent on something that other companies considered obvious.
Apple approached Samsung with a ridiculous $30 per device royalty offer. Samsung believed that a reasonable person would consider Apple's patents to be invalid, and forged ahead without a license. Judges agreed that a reasonable person might have believed such, and therefore ruled that Samsung's infringement was not legally willful.
Likewise, as you noted, Apple knew of the VirnetX patents and infringed on them anyway, believing that there were invalid and/or were priced too high. Apple used every argument against VirnetX, that Samsung had used against Apple, but failed to convince the judge that he should throw out the jury's verdict of willfulness.
It didn't help that Apple's lawyers had tried to suppress the testimony of one of their own engineers that Apple knew about the patents before putting out infringing products. Their attempt to hide that fact just made them look extra guilty.
The patents used against Apple were actually invented by the head officers of VirnetX. They sell products and services based on them. So, not a typical troll.
Yep, but so far, their gamble hasn't worked out in this case. So it goes. Roll of the court dice. As usual with software patents, this is more about legal maneuvering than actual justice.
First off, you should not be able to patent a concept. It’s one thing if I can patent my unique soda formula but totally ridiculous that I can patent the concept of soda itself.
Patents that cover concepts not only work against capitalism but also all free-market principles.
Patents that cover concepts not only work against capitalism but also all free-market principles.
I just love reading this thread and the Samsung thread in tandem
Assuming that to be the case as far as penalty vs. license goes, then the ~$1/device in licensing fees for 4 VPN patents seems quite high.
You could legitimately argue (and would probably be correct) that it's still fair based on what Apple was trying to get from Samsung for similarly small-part-of-a-big-whole patents, but in the end it really just means that Apple was being as totally unreasonable in their own pricing attempt as this.
The bottom line in any of it, though, is that software patents as a concept are broken and the situation is only getting worse. Situations like this have little to do with justice or fairness regardless of who wins or loses; it's essentially a large-scale game of chicken and gotcha based around an entire process that shouldn't exist in anything like the state it does, if it exists at all.