VirnetX Asking For $532 Million From Apple in Patent Retrial

[MacRumors]

VirnetX Holding Corporation is asking for $532 million from Apple for using patented technology for communication services like FaceTime, iMessage and more, the firm told a federal jury today, according to Bloomberg.

"Apple hasn't played fair. They have taken Virnetx's intellectual property without permission," VirnetX lawyer Brad Caldwell of Caldwell Cassady told the jury in Tyler, Texas.

Greg Arovas, Apple's lawyer, said that Apple believes in "fairness and protecting intellectual property," noting that VirnetX "keeps moving the boundary" and asking for "more and more and more" money. In 2012, the firm was awarded $368 million in a jury trial. However, the decision was thrown out in 2014 as the verdict was influenced by the instructions given to the jury during the trial.

The patent suit can be traced back to 2010 over a pair of patents related to virtual private networking (VPN) connectivity. This retrial, which will last through next week, will largely focus on whether any VirnetX patents are infringed in either FaceTime or iMessage. Apple was already found to be infringing the patents with its VPN On Demand service. Apple cannot make the same arguments they made in the first trial, however.

VirnetX makes a majority of its revenue on patent licensing. Arovas said that, on a per-unit basis, VirnetX's $200 million settlement with Microsoft over similar violations is less than a tenth of what its currently seeking against Apple.

Article Link: VirnetX Asking For $532 Million From Apple in Patent Retrial

 

[alleggerita]

Cue the Apple haters in 3...2...1...

 

[BrodieApple]

Patent trolls

 

[Devie]

Patents are obviously very important, but you should not be able to patent such broad or basic ideas

Or I should patent the method of putting pants on and sue everyone

 

[Kajje]

Patent company shells should be illegal. Either you use your patents to build something, you license them out at a fair price or you sell them to a company which complies to these previous rules.

What we must not forget that many of these trials are perfectly orchestrated by law 'engineers' with a hidden agenda. While the law might be quite the matrix for most of us, the techniques they use in the end, look baffling easy.

In these reigns where stakes are unbelievably high, many things don't look like they are. It's well possible that a patent troll sueing company X is in fact somewhere owned by company X.

 

[thefourthpope]

It's well possible that a patent troll sueing company X is in fact somewhere owned by company X.

What? Could you explain this to me? I mean, I guess I get that a subsidiary could sue another subsidiary, but...why?

 

[perrycollective]

"Fair", "lawyer", "intellectual property", "Tyler, Texas".

THINGS NO ONE WITH COMMON SENSE WOULD BELIEVE for $400, Alex!

 

[MH01]

Cue the Apple haters in 3...2...1...

cue the first trolling comment in.....1

You might want to read the article, not much love on MR for patent trolls.

 

[Nuvi]

US patent laws are crime against humanity. I want patent on patent trolling so I can sue the trolls for stealing my IP.

 

[John Mcgregor]

As a company that it is it should not be allowed to sue anyone.

 

[Max(IT)]

Patent trolls at their finest...

 

[Kajje]

What? Could you explain this to me? I mean, I guess I get that a subsidiary could sue another subsidiary, but...why?

Court decisions have a very strong influence. They result in precedents and have impact on current and future laws, policies, and practices. Different courts can also have an influence on each other.

If one has a way to make precedents, it basically writes a new law.

But of course it's not just as easy as that. I'm in no way pretending I have any clue about justice or law. But I'm sure the system is somewhere hackable. I don't mean corruption or other illegal practices. Just plain old legal strategy.

Investing a couple millions in a battery of law engineers could make or save you a couple billions up stream.

 

[Kabeyun]

Apple cannot make the same arguments they made in the first trial, however.

Really? That's a rule?

 

[oneMadRssn]

Patent company shells should be illegal. Either you use your patents to build something, you license them out at a fair price or you sell them to a company which complies to these previous rules.

What we must not forget that many of these trials are perfectly orchestrated by law 'engineers' with a hidden agenda. While the law might be quite the matrix for most of us, the techniques they use in the end, look baffling easy.

In these reigns where stakes are unbelievably high, many things don't look like they are. It's well possible that a patent troll sueing company X is in fact somewhere owned by company X.

I don't think this company is breaking you proposed "rules" at all.

First, isn't litigation a way of achieving the "license them out at a fair price" principle you want? How do you get someone to pay anything at all without being willing to enforce the law? Without threat of litigation, nobody would pay anything.

Second, what about universities and the patent portfolios they develop from their research labs? Often licensing pays for future research grants, but sometimes litigation is needed to get those that refuse to pay at all.

Third, what about financiers? We need investors (venture capital, or otherwise) to invest in startups. Since often startups don't work out, they need some collateral to secure their investment. Often IP is the only asset small startups have to offer. Shouldn't the investors be able to recoup some of their losses in that scenario by licensing, and litigating where needed, that IP?

 

[PinkyMacGodess]

What? Could you explain this to me? I mean, I guess I get that a subsidiary could sue another subsidiary, but...why?

BENGHAZI!!! Sun spots!!!
[doublepost=1453814316][/doublepost]

I don't think this company is breaking you proposed "rules" at all.

First, isn't litigation a way of achieving the "license them out at a fair price" principle you want? How do you get someone to pay anything at all without being willing to enforce the law? Without threat of litigation, nobody would pay anything.

Second, what about universities and the patent portfolios they develop from their research labs? Often licensing pays for future research grants, but sometimes litigation is needed to get those that refuse to pay at all.

Third, what about financiers? We need investors (venture capital, or otherwise) to invest in startups. Since often startups don't work out, they need some collateral to secure their investment. Often IP is the only asset small startups have to offer. Shouldn't the investors be able to recoup some of their losses in that scenario by licensing, and litigating where needed, that IP?

But look at some of the past patent troll lawsuits. Look at the patents those trolls have Hoovered up at bankruptcy sales, and estate sales. Look at how they try to extort millions from successful companies, and leave smaller companies alone in some cases.

Sure, there are 'good' patent trolls, and they are defending 'legitimate' patents, and there are ruthless companies that are all lawyers, and DO troll the bankruptcies and DO troll the estate sales, and DO try to 'leverage' those trolled patents to make their whole income source those patents.

Thuggery is illegal, and the Mafia was run out of business, but 'legal' thuggery like hedge funds and patent trolls are able to fully fund politicians and get away with it. Oh, and there are 'favorable' judges and courts that thrown common sense on the ground and stomp on it...

Patent trolling is a cancer eating at the IT industry, and until money is drained out of politics it won't get any better.

 

[4jasontv]

What? Could you explain this to me? I mean, I guess I get that a subsidiary could sue another subsidiary, but...why?

I'm not really familiar with the case, but I can justify the comment. Let's say you own two companies, X and Y. X sues Y for an absurd amount, and you tell the people at Y not to fight it. X wins. Now you approach companies A, B, and, C and say look what the courts say is "fair". We only want payout * 30%. If you fight them you risk going against precedent and paying a higher rate. They might even get special treatment because they did t try and gouge you at first.

 

[kdarling]

Live by the sword, die by the sword.

Apple, along with fellow consortium members such as Microsoft, created one of the worst patent trolls around (Rockstar) after they bought up Nortel patents for a ridiculously high price, and needed to see some return for them. Rockstar employed nothing but engineers paid to dig into corporations' code to see if any had inadvertently infringed on a patent they could sue over.

Apparently Apple et al later realized that this troll creation made it difficult to claim indignation against other patent trolls, so last year they had Rockstar sell off the patents to yet another patent entity who's supposed to license them fairly. We'll see.

Patent trolls

Interestingly, many of VirnetX's patents were originally from projects created by SAIC for NSA and CIA.

 

[the8thark]

I'm not really familiar with the case, but I can justify the comment. Let's say you own two companies, X and Y. X sues Y for an absurd amount, and you tell the people at Y not to fight it. X wins. Now you approach companies A, B, and, C and say look what the courts say is "fair". We only want payout * 30%. If you fight them you risk going against precedent and paying a higher rate. They might even get special treatment because they did t try and gouge you at first.

Being able to set your own precident using two companies you own should be illegal though.

 

[AFEPPL]

Apple seem to have no issue using the courts when its in their favour... what goes around comes around..

 

[Sasparilla]

Its good to remember VirnetX leadership had extensive ties with the NSA / CIA and the results of this patent suit was that Apple had to route their Facetime communications through Apple Servers (where its much easier to monitor at govt request) rather than direct person to person links like the original Facetime model. If memory serves they wouldn't offer Apple a licensing price to continue the direct person to person model.

http://anewdomain.net/2012/11/06/who-is-virnetx-apple-must-pay-300m-plus-breaking/

 

[0007776]

Apple seem to have no issue using the courts when its in their favour... what goes around comes around..

Yep, our patent system has major problems, but until they are fixed Apple shouldn't be surprised when it's own tactics are used against it.

 

[Rocketman]

The problem isn't patent trolls per se. The problem is their business model is to maximize revenue through litigation when licensing and settlement is perfectly suitable to their "targets". They are violating court orders to do settlement negotiations in "good faith". That is the only valid approach to breaking malicious patent trolls.

IP rights holders are perfectly valid. Abusive trolls are not. But the only avenue to address it is even more litigation.

I would like to see a start-up disrupt litigation and develop a system to narrow the issues and law to the case at hand and stop the flurry of paper designed to harass. The courts and real people would love it. The lawyers would hate it. Super high revenue low hanging fruit for a software solution.

Rocketman

 

[69Mustang]

Live by the sword, die by the sword.

Apple, along with fellow consortium members such as Microsoft, created one of the worst patent trolls around (Rockstar) after they bought up Nortel patents for a ridiculously high price, and needed to see some return for them. Rockstar employed nothing but engineers paid to dig into corporations' code to see if any had inadvertently infringed on a patent they could sue over.

Apparently Apple et al later realized that this troll creation made it difficult to claim indignation against other patent trolls, so last year they had Rockstar sell off the patents to yet another patent entity who's supposed to license them fairly. We'll see.

Rockstar? Pssh. Get outta here with that crazy talk. That's a video game company or an energy drink.
You won't get any acknowledgment of that Rockstar's existence in this crowd. Especially since Rockstar Consortium was allegedly majority funded by Apple. What was one of their first actions? Sue Google, Samsung, Huawei, LG, Pantecg, HTC, and ZTE. Patent trolling at it's finest. It made a grand reunion of pot meeting kettle. Good thing Apple realized you can't complain about patent trolls when you're one of the biggest and most powerful.

 

[oneMadRssn]

But look at some of the past patent troll lawsuits. Look at the patents those trolls have Hoovered up at bankruptcy sales, and estate sales. Look at how they try to extort millions from successful companies, and leave smaller companies alone in some cases.

Sure, there are 'good' patent trolls, and they are defending 'legitimate' patents, and there are ruthless companies that are all lawyers, and DO troll the bankruptcies and DO troll the estate sales, and DO try to 'leverage' those trolled patents to make their whole income source those patents.

Thuggery is illegal, and the Mafia was run out of business, but 'legal' thuggery like hedge funds and patent trolls are able to fully fund politicians and get away with it. Oh, and there are 'favorable' judges and courts that thrown common sense on the ground and stomp on it...

Patent trolling is a cancer eating at the IT industry, and until money is drained out of politics it won't get any better.

I am all for getting money out of politics and re-focusing the government on citizen interests, but I think it's a pretty big leap you're making from bad patent trolls to mafia thuggery and corrupt politicians.

We can have patent reform that addresses the issues of forum shopping (although it's a very minor issue if you look at the actual data) and clueless judges, but we must do so carefully without wrecking the value of patents.

As I said, there is nothing wrong with people or companies going to bankruptcies or estate sales to buy patents to then monetize them - their involvement is what makes the money in innovation flow. What is a bankruptcy for if not to sell assets to the highest bidder? If those patents aren't worth anything, then how do the creditors get paid back? If they can't get their money back this time, why would they invest in another startup next time? You say leveraging the patents is bad? But it's one mechanism of getting licensees to pay what they owe. Without the force of litigation, why would anyone pay at all? None of these companies are breaking the law. Is calling the police when someone is trespassing on your property 'legal thuggery'? This is the same thing.

 

[Kajje]

Second, what about universities and the patent portfolios they develop from their research labs? Often licensing pays for future research grants, but sometimes litigation is needed to get those that refuse to pay at all.

Universities are working completely different than common belief.
Universities are not in for the protit. Their research is not commercially driven.
The truth is that universities are getting most of their money from the government and are tasked with finding a solution for problem X. They don't have a fixed budget or time frame to find that solution.

The actual research is part of the common academic growth.
Once they find the solution their research is either donated or licensed (as in, for gratis) to an institution, be it via or direct to an institution (spin-off, government OR commercial, mostly with some predefined rules) that will patent it and make something good out of it.

So what are the governments' benefits I hear you ask? Their universities get some credit and fame, people will get a job, companies will pay more taxes, export will grow, country and/or world might become a better place.