Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
U.S. Supreme Court Refuses to Hear VirnetX Patent Case, Saving Apple $503 Million
- Thread starter MacRumors
- Start date
- Sort by reaction score
The comment was more about my surprise that it’s been going on for this long more than what the lawyers and judges were doing. I’m sorry I was shocked.
So, if you've invented something that would be of interest to Apple but don't have the resources to compete with Apple, then all they would need to do is refuse to buy the patent until the courts took it away from you for inaction and then they could copy it all they want?
This isn't as cut and dried a situation as people want to make it out to be. It's business. You're going to have laws (patents) meant to encourage certain behaviors (investment in innovation) that someone is going to realize they can use outside their original intent, possibly as a tool to bluff and extort. The only way to know whether they are legit or not is to look at it carefully enough to figure it out-- and that's expensive. It really doesn't help that most people involved in the process-- the judge, the lawyers, the jury, and most likely the patent owner if they've bought the IP-- don't understand the technology.
And not understanding it is a requisite of receiving a patent. It has to be non-obvious to someone skilled in the art. So the confusion is literally baked into the process.
Yes it's hard. And expensive. But I really don't care if these companies are spending millions of dollars on lawyers. I know that fact seems to really bother people, but every major ecosystem develops parasites. Business is no different.
The fact that this "company" is based in Zephyr Cove, Nevada, of all places is just funny to me, as someone familiar with the area. It's a small resort community on Lake Tahoe. "VirnetX Holding Corp." is in a strip mall office building. That they made it all the way to the Supreme Court and previous won against the world's most beloved trillion-dollar company is something, I guess.
Apple has a massive legal team as regular full-time employees that get paid considerably well.
Full-time or not, the point is it costs a considerable amount. It’s not a win, it’s damage control. The system is flawed.
I know others answered but I'm providing a source. It really has been 14 years. Note that 2010 is only 3 years after VirnetX was incorporated. Its entire business model is suing companies for patent infringement.
"In 2010, VirnetX sued Apple in district court. VirnetX alleged infringement of four patents, including the ’504 and ’211 patents. VirnetX asserted claims of the ’504 patent and claims of the ’211 patent. VirnetX Inc. v. Apple Inc. In October 2011, Apple filed requests for inter partes reexamination of the ’504 and ’211 patents with the PTO. In Apple’s Reexam Nos. 95/001,788 (“788 case”) and 95/001,789 (“789 case”) (collectively, “Apple reexams”), Apple challenged all claims as anticipated by the Provino reference or rendered obvious by Provino in view of other prior art."
VirnetX Inc. v. Apple Inc., No. 17-1591 (Fed. Cir. 2019)
VirnetX appealed the Patent Trial and Appeal Board's decision related to three inter partes reexaminations maintained by Apple and Cisco. In this case, the PTO concluded that Apple was not barred from maintaining its reexams by the estoppel provision of the pre-America Invents Act (AIA) version...
law.justia.com
Last edited:
I think the commenter meant VirnetX has a lot of time on its hands. The company holds patents and doesn't really do anything. They claim they have a product (VirnetX One) and they call themselves "The Leading Cybersecurity Company" but their money comes from suing companies for patent infringement. For example, in 2022 the company had $45,000 of gross income (not a typo! https://www.wsj.com/market-data/quotes/VHC/financials/annual/income-statement).
Here is their long term revenue: https://www.macrotrends.net/stocks/charts/VHC/virnetx-holding-corp/revenue
The only reason the company had any significant revenue since it was founded in 2007 is because Apple was ordered to pay $440 million in 2019.
The company is the textbook definition of a patent troll. Their business model is essentially gambling that they can win some lawsuits and keep going.
Just get rid of the patent trolls all together. If you patent something and don't use it, it's no longer yours.
I see two problems with this.
1. Little Guy comes up with a great idea. He builds a small, cheap, yet workable prototype in his garage, but is having trouble raising capital to build a consumer device. Along comes the neighbor who works for Large Company. He sees the prototype and suddenly Large Company is coming out with a strikingly similar device. Does Little Guy loose out because he wasn't actively using his patent?
2. Small Company develops an idea and builds several prototypes. They get Iteration 1 out to market and it fails, nearly putting them in bankruptcy. Patent Troll recognizes the value of Small's idea and is wiling to pay millions for it. Small Company sells the rights to Patent Troll, using the cash to save their business. Patent Troll then licenses the patent to Large Company for production and earns a return on their investment.
In both of these scenarios, there are good reasons to maintain patent law. And, in both of these scenarios, the only problem anyone will face is when Large Company, knowingly and purposely, violates the patent and sells a product without licensing. The current system then rewards Large Company with years long, expensive, litigation that will drain Patent Troll of much needed funding to maintain their investment strategy, while, at the same time, Large Company benefits from ill-gotten profits.
Patent Law isn't necessarily broken. Tort Law and litigation procedures are. Ask any litigation attorney if they believe our current system is "fair" or "reasonable". The answers you'll get are a severe indictment of our legal system.
If he's actively designing something, he isn't a patent troll. The problem is these companies create these and have absolutely no plans at all to do anything with it, other than sue someone who does make something similar.
The real problem is that FAR too many things get patents.
The VAST majority of patents should never have been issued. Patents have been handed out by the millions, when there should only have been thousands.
The best solution would be a cap on the number of patents issued, no more than a thousand a year, with the expectation that the cap won't be met because the level of innovation to get a patent should be that high.
And the number of "do a thing that already exists, but this time with a computer" patents should be ZERO. Software should be unpatentable. Design patents should not exist. A patent examiner's primary job should be to say "no".
The VAST majority of patents should never have been issued. Patents have been handed out by the millions, when there should only have been thousands.
The best solution would be a cap on the number of patents issued, no more than a thousand a year, with the expectation that the cap won't be met because the level of innovation to get a patent should be that high.
And the number of "do a thing that already exists, but this time with a computer" patents should be ZERO. Software should be unpatentable. Design patents should not exist. A patent examiner's primary job should be to say "no".
Ideally they would have heard the case, and found software patents unconstitutional. Like they should have been found in the 90s.
Maybe one day...
How does this work exactly? The first thousand submissions that pass review are granted, so you're screwed if your flash of brilliance comes in October?
Or is there a national ranking of the millions of submissions that pass review each year resulting in the top 1000 being granted? Is that somehow going to be easier or cheaper? And which year? Patents take years to be reviewed, often with continuous back and forth between the examiners and the inventor to clarify, narrow, and explain.
Or should it be a lottery? Where "blinking cursor" has even odds against "automated cancer removal bot"?
There's no conceivable way of drafting a review process that ensures that less than 1000 of the best inventions pass. It will become completely arbitrary. We've got a hard enough time deciding what is non-obvious to one skilled in the art.
Maybe have school children vote which invention to name Patty McPatent?
It's telling how many people think these complex systemic challenges can be resolved with 10 minutes of thought... But still, if you come up with a novel business method to resolve this dilemma, I'd recommend filing for a patent on it.
A patent examiner's job should be to protect the fruits of investment in innovation to encourage more such investment.
The vast majority of patents are defensive. Companies patent what they're doing to prove they have the right to do it and can't be barred from producing their products by someone else. Most patents aren't particularly hard to work around. Most companies don't sue each other over patents because they don't want to be countersued-- mutually assured destruction. Of course this is one of the evolutionary advantages of patent trolls by which they've adapted to their environment-- they don't sell products that they can be countersued for.
Still, if someone invented something that Apple later turned into a product worth billions, shouldn't they be compensated for their work? If someone claims they had a great idea that wasn't so great, shouldn't Apple be protected from those damages?
Yes, software patents are an incredibly effective way of stifling innovation.
You may be thinking of copyright. Software would still be covered under copyright.
I just have a sensitivity around that phrase since as a child it made me feel bad for not having more friends when people said that when I took an interest in different things.