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Apr 12, 2001
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Apple has paid VirnetX a total of $454,033,859.87 following the conclusion of a long-running patent infringement battle, VirnetX announced today.

virnetx_apple.jpg

The patent dispute between VirnetX and Apple dates back to 2010 when VirnetX accused Apple's FaceTime feature of infringing on its intellectual property, and there are multiple lawsuits involved.

In this particular case, Apple was ordered to pay $302 million in October 2016, but with interest and other costs included, the judgement was increased to $440 million. Though Apple appealed the $440 million award many times, courts have continually ruled in VirnetX's favor.

Most recently, Apple attempted to get the U.S. Supreme Court to hear its appeal, but the Supreme Court in February 2020 declined to intervene.

Apple claimed that the U.S. Patent and Trademark Office had canceled "key parts" of many of the patents involved in the case, but the courts rescinded that cancelation, leaving Apple responsible for the $440 million payment.

This is just one of two VirnetX cases that Apple has been fighting. In the second case, VirnetX was awarded $502 million, but the ruling was partially overturned last year and sent back to the lower courts to determine new damages. Apple in February attempted to get a rehearing to determine patent validity, but was denied.

Article Link: Apple Pays VirnetX $454 Million for Patent Infringement After U.S. Supreme Court Refuses to Hear Apple's Appeal
 

dubar

macrumors newbie
May 8, 2019
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Kinda wonder how much actual revenue the company has made compared to how much they've won in lawsuits.
 
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lkrupp

macrumors 65816
Jul 24, 2004
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Apple tends to fight-to-the-death on stuff like this when other companies just pay the licensing fee. I don't know if that attitude comes from the top or from the legal department. Apple's lawyers have got to know when to hold 'em and when to fold 'em so I suspect top management or Cook himself orders them to soldier on even if they know the game is over.
 
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Carnegie

macrumors 6502a
May 24, 2012
771
1,889
Kinda wonder how much actual revenue the company has made compared to how much they've won in lawsuits.

VirnetX has very little revenue on a year-to-year basis. It's had less than $10 million total over the last 10 reported years. It loses $10-30 million every year.

It's managed to survive with money it received in 2014 and 2010 from settling with Microsoft ($223 million total) and with paid-in capital. It won't even get to keep all of this payment from Apple. It effectively bought the rights to the IP in question and has to pay part of what it generates from that IP to the previous owner.

The company's share price has basically reflected the market's assessment of what it will be able to get from Apple in these lawsuits. Those actions aside, the company really isn't worth much. So you consider the likelihood that VirnetX will ultimately get paid from those actions, and how much it's likely to get paid, and factor in expenses it will have... and you get an assessment of its value.

That's why its market cap is still only a little over $400 million, even though it got this payment and has won another judgment against Apple (though the damages in that case have to be reconsidered). It's also why its share price wasn't being hit like many other equities were in the broader market sell off.
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...

Most recently, Apple attempted to get the U.S. Supreme Court to hear its appeal, but the Supreme Court in February 2020 declined to intervene.

Apple claimed that the U.S. Patent and Trademark Office had canceled "key parts" of many of the patents involved in the case, but the courts rescinded that cancelation, leaving Apple responsible for the $440 million payment.

...

The court (i.e. the Federal Circuit) had not rescinded the cancelation of the patents (i.e. patent claims) at issue in the petition to the Supreme Court. The Federal Circuit had upheld the invalidation of those patents. (There were invalidations of 2 other patents which the Federal Circuit sent back to the PTAB to be reconsidered.) Those patents, which are part of what Apple was found to have infringed and ordered to pay damages base on (in the first case, for which it has now paid the judgment), are still invalid. But Apple has had to pay damages based on them regardless.

Part of what Apple wanted the Supreme Court to do was give effect to the invalidation of those patents, or instruct the Federal Circuit to consider whether it should give effect to those invalidations, in the infringement case we're talking about.
 
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JonGarrett

macrumors member
Mar 27, 2016
88
112
New York, NY
Kinda wonder how much actual revenue the company has made compared to how much they've won in lawsuits.

What does that matter? That doesn't give another company the right to use their IP without permission and compensation.
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They are a joke of a company - Virnetz...more like a Virus than some other things out there.

And what about all the other cases Apple has lost recently for stealing?
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Whether it's stealing other companies and some universities IP or slowing down iPhones there will always be Apple defenders who see nothing wrong.
 
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840quadra

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Staff member
Feb 1, 2005
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Going to their (poorly designed) website it’s clear what their industry focus is, lawsuits.

They talk a little about their technologies, but the site is mostly dominated with investor BS, and a huge section discussing their wins over Apple and other lawsuits.
 
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zorinlynx

macrumors 604
May 31, 2007
6,523
10,765
Florida, USA
It's odd that this hasn't affected AAPL stock price much. $454 million is a whole...

400th...

of its cash hoard. Nevermind. I started writing this post before I looked up the numbers and can't believe just how massive AAPL is.
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Odd thing to call a company that just received a check for $454 Million.

How much debt do they already have? It may not be that much in the end. After all they've been fighting this lawsuit for a while.
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Apple tends to fight-to-the-death on stuff like this when other companies just pay the licensing fee. I don't know if that attitude comes from the top or from the legal department. Apple's lawyers have got to know when to hold 'em and when to fold 'em so I suspect top management or Cook himself orders them to soldier on even if they know the game is over.

It's because a lot of times these patents are ********.

Some method of doing something gets patented, but not used for anything. Then a company like Apple comes up with the same tech independently and makes an actual product. Then they get sued for it.

I'm not saying that's the case here, just saying it's important to defend yourself against lawsuits from these companies that just stockpile patents and don't make anything with them. You never know what might be buried in some patent when coming up with a new (to you) way of doing something.
 
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iRutherford

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Oct 30, 2018
319
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Columbus, OH
Apple tends to fight-to-the-death on stuff like this when other companies just pay the licensing fee. I don't know if that attitude comes from the top or from the legal department. Apple's lawyers have got to know when to hold 'em and when to fold 'em so I suspect top management or Cook himself orders them to soldier on even if they know the game is over.

That is honestly untrue. They mostly choose to settle because dragging the lawsuit out costs a lot of time, effort and money especially for a behemoth like Apple. If you want a company who doesn't let patent trolls sue and truly fights to their death, look at Newegg.
 
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ArtOfWarfare

macrumors G3
Nov 26, 2007
9,133
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It won't even get to keep all of this payment from Apple. It effectively bought the rights to the IP in question and has to pay part of what it generates from that IP to the previous owner.

That... makes this company actually seem way more useful to me, actually.

We're looking at this wrong, maybe. VirnetX isn't a patent troll so much as a law firm or something. They have the resources to defend a patent from Apple in a way that some little inventor wasn't able to.
 
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V_Man

Cancelled
Aug 1, 2013
654
1,122
Kinda wonder how much actual revenue the company has made compared to how much they've won in lawsuits.
That’s the revenue. They own the patent. Apple has won massive amounts of money during other companys. Sometimes you lose. Kinda like in life.
 
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az431

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Sep 13, 2008
2,131
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Portland, OR
Virnetx readying their next set of their master patent troll plan

If you owned 1,000 acres of land, and you were told you couldn't kick trespassers off because you never used it for anything, you would be signing a different tune.

They owned a patent, Apple infringed it, a jury agreed, and Apple lost at every appellate level.
 
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farewelwilliams

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Jun 18, 2014
4,534
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If you owned 1,000 acres of land, and you were told you couldn't kick trespassers off because you never used it for anything, you would be signing a different tune.

They owned a patent, Apple infringed it, a jury agreed, and Apple lost at every appellate level.

Awful analogy. It's more like someone came up with a simple row layout for yielding good agricultural land use efficiency and VirnetX bought the rights to that simple layout hoping someone like Apple will come up with that same obvious idea so they can sue.
 
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bollman

macrumors 6502
Sep 25, 2001
380
695
Lund, Sweden
If I were an inventor, I would most probably sell my idea to the highest bidder. I, as a person would have no way to defend my rights as a patent holder, since I could not afford it. So, I think I'd rather sell my patent and pay off my mortgage and think nothing more of it.
So, if this company never invented it but paid the inventor, being an individual or a company, good money for the patent on the presumption of they making future money off of licensing deals, why is that a bad thing?
I makes innovation happen since people can make money off of patents even if they're not Apple-sized.
You can call these companies "patent trolls" as much as you like, but someone actually made the invention, got it patented and sold the patent, fair and square.
 
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