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VirnetX Wins Another $502.6 Million Award From Apple in Patent Trial

Why were
ActionableMango said:
The suit was filed in United States District Court for the Eastern District of Texas​

This tells you everything you need to know. This is where all patent trolls file, because the district is pro-patent troll.
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I was just going to ask about this. VirnetX is based in Nevada. Apple is in California. Why file in Eastern Texas, specifically? I'm going to sound like a fanboy by saying this ruling is garbage, but I would still say that if Apple were swapped out for Samsung.
 
Michael Goff said:
How is it contributing to society by harassing people that make stuff while you make nothing?
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I get the distinct feeling that the posters yapping about "having to make something with the patent" have never invented or patented anything.

LISTEN UP, ALL OF YOU WHO THINK YOU SHOULD NEED A PRODUCT TO OWN A PATENT:

Let's say that YOU invent a new way of saving battery power in a smartphone. You patent it. But you cannot afford the millions of dollars it would take for you to build and sell a smartphone yourself.

So what do you do? Well, duh, you sell or license your invention to anyone who wants to use it in their product. Or if you're really not into spending your life tracking down clients and selling to them, you sell or license your invention to a patent holding company which has the resources to do the marketing for you. (This is pretty much what universities do internally.)

Licensing your invention to anyone who wants it, is contributing to society. NOT LICENSING IT would NOT be contributing. And of course companies are free to NOT use your patent if they don't want to.

So there's nothing wrong with not making a product yourself. This is AMERICA AT ITS BEST, letting even the small guy make a living from his inventive labors.

WHAT APPLE DID WITH VIRNETX:

Later you discover that a major company is using your method without paying for a license from you. So you offer them a license. But they instead call in their lawyers who do the usual claims that it's not a valid patent, and even if it is, it's not worth what you want for it.

Problem 1: Apple itself had tried to patent at least one of the methods, but found that they could not because Virnetx already had a patent. One of their engineers even admitted it, before Apple's lawyers tried to withhold his testimony. Ooops! Proof of willful infringement of a method that even Apple had thought was patentable.

Problem 2: Apple then claimed that it would cost them too much to switch to a different method. Ooops again. Proof that the patent really was worth money after all.

UPSHOT:

Folks, someone who licenses a patent freely to anyone for a fee is not evil. They're making a legitimate living and offering their invention to those who want to enhance their products. It might even be you, if you're creative.

Unfortunately big companies can use legions of lawyers to try to get around paying you. Sometimes that works, sometimes it doesn't.
 
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A lot of posters are throwing around the term "patent troll." Just because a patent holder doesn't make or sell the patented product doesn't make them a troll. Here's an overview of patent litigation that I posted before when the first VirnetX case was discussed in MacRumors. The first paragraph mentions that there's no need for someone to use the invention in a product to get a patent, and patent trolls are mentioned in the next-to-last paragraph.

In order to get a patent, the applicant goes through a process where the patent office determines if the invention is new or is not obvious to people in the field of the invention. There are tons of cases that discuss how this determination must be done and it's pretty rigorous. The patent examiner will usually present the applicant with examples of potentially invalidating prior art (previous publications or previous patents that describe all of the elements of the patent being applied for or that would be obvious to combine) and the applicant tries to argue why the patent claims are different or the applicant may amend the claims to narrow them to get around the prior art. If the patent applicant gets by this process, the patent gets granted. There is no requirement that the applicant must use the invention in a product. This protects inventors like people working in their garages who might not have the wherewithal to manufacture their invention. The authors of the U.S. Constitution felt that patents were so important to promoting science and useful arts that they included it explicitly in the Constitution.

If the new patent holder decides to sue a defendant, such as Apple, for infringement of the patent, the issue of the validity of the patent gets scrutiny all over again in court. In addition, the issue of whether there's infringement at all gets addressed by the court. Regarding the validity issue, the accused infringer looks for prior art just like the patent examiner did. If the issue of validity is so clear-cut, the court can decide it on summary judgment without the need for a jury. If the claims of the patent are invalidated by the court (whether by summary judgment or after a jury trial), there's no need to consider infringement at all since you can't infringe an invalid patent. Also, once a patent is invalidated, it can't be asserted against anyone else, including competitors of the original defendant.

If some or all of the patent claims aren't invalidated by the court, the patent holder must prove that the accused product contains each and every element of the asserted patent claim or that the accused product is only insubstantially different. Again, if the issue of infringement is clear-cut, the court can decide it on summary judgment. If not, the jury gets to decide.

Regarding both validity and infringement, one of the most important procedures in court is the determination by the judge of the meaning of certain words in the patent claims. This is referred to as "claim construction." The patent holder tries to argue that any disputed meaning should be broadly interpreted to cover the accused product, but not so broad so as to encompass prior art which might invalidate the claim. The accused infringer usually argues for a narrower interpretation so as to avoid infringement because the burden of proof for invalidity is higher. It depends a lot on the particular facts of the case and the strength of the validity and infringement issues. The patent holder does not have to prove the infringement was intentional to recover damages; however, if intentional infringement is proven the court can award additional damages.

Whether decided by the judge or the jury, the issues of infringement and validity can be appealed to the Court of Appeals for the Federal Circuit. This appellate court specializes in patent cases and hears appeals from every jurisdiction in the country, unlike the other federal appellate courts which hear cases only from their geographical area. The appellate judges in the Federal Circuit are very good at what they do. They can reverse the findings in the trial court of validity and/or infringement if warranted. It's possible for the losing party in the Federal Circuit to appeal to the Supreme Court, but the Supreme Court accepts very few appeals.

Generally speaking, the system works because it's so rigorous. The cases that garner the most attention are usually out of the norm. Those are cases that sometimes involve "patent trolls." I don't define a patent troll as an entity that asserts a patent without having a competing product that incorporates the invention. That would include legitimate inventors in garages or in academia. But I do define a patent troll as an entity that asserts a patent of questionable validity and settles the claim for less than the potential defense costs for the accused infringer. Some potential defendants will grit their teeth and settle because patent litigation is expensive and the outcome isn't guaranteed. Patent trolls usually don't want their patent to be tested in court.

No system is perfect. Recently, the venue rules were changed so that patent holders now have more restrictions in choosing where they can file their lawsuit. The federal court in the Eastern District of Texas (where the VirnetX case against Apple was filed) was known for being generous to patent holders. The new venue rules will make it much harder to file there.
 
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"The Patent Trial and Appeal Board has also said that the patents involved in the case are invalid in separate cases that are being handled by the U.S. Court of Appeals for the Federal Circuit in Washington."

That sentence means everything. The patents that VirnetX claims Apple infringed upon are invalid. VirnetX will have to overcome an invalidity holding in order to collect on this. Apple will win the appeal unless the Court ruling holding invalidity is overturned.
 
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deanthedev said:
Going to be lots of MR posters celebrating tonight. Seems like they’re only happy when something negative happens regarding Apple.
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Rightly so. Rather than Apple just paying/licensing up front, they choose to cripple Facetime, and end up paying in the end. FaceTime has never worked 100% since then.
 
[doublepost=1523456187][/doublepost]US Supreme Court needs to step in an invalidate the whole patent troll business model. Does nothing but drive up the costs of goods to consumers.[/QUOTE]

The concept of a patent is to grant an artificial monopoly for the exploitation of an idea. However, the idea has to be novel (ie new to world, inventive and non-obvious) and therefore would typically involve some form of research and development. As such, the fundamental concept of a patent and a business model around the exploitation of patents is sound. I think the issue has become patent offices around the world not being equipped to deal with assessments of inventiveness and non-obviousness across a broad range of scientific and technical endeavours and granting patents that really should not be granted.
 
TheMacDaddy1 said:
VirnetX originally had 4 patents related to LTE. They have never used one to sell an actual product. They have over 100 now. Nothing they created, just bought up. 90% of their employees are lawyers.

They define the term "Patent Troll".
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What you seem to ignore is that the companies who filed and held the original patents that Apple violated were too small and underfunded to take on the giant Apple. What they do is sell on the patent to what you have described as a "Troll" but is actually providing a valuable service to small companies who hold patents by compensating them for the original patents and expending their own resources to take on larger companies.
I say keep up the good work and keep large companies honest.
 
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engbren said:
I think the issue has become patent offices around the world not being equipped to deal with assessments of inventiveness and non-obviousness across a broad range of scientific and technical endeavours and granting patents that really should not be granted.
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I think that is a little too generalized. The USPTO hires patent examiners who specialize in particular fields of art, and tasks them with reviewing the various inventions. Patent examination is not a process that is "easy" to get through.

The Court system uses the Court of Appeals for the Federal Circuit to deal with the litigation side of things, which is another safety net. The patent troll concept is complex, and there is no easy way to deal with them. The problem lies largely with the Federal Court Judges who are not members of the Federal Circuit Ct. of App. These are just normal federal judges, with no requisite scientific background, who are tasked with the initial factual finding and determination of validity/infringement.
 
Jimmdean said:
I think the answer is easy - be very strict about which patents are approved and do not allow the sale of patents.
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Apple would hugely disagree with the idea that patents should not be bought or sold.

Apple buys up patents all the time, often by buying a company and then dissolving it. Where the heck do you think they got patents for touch, face recognition, and a zillion other things??

Comparatively little of an iPhone was invented by Apple itself. It licensed or bought patents for the majority of it.

Apple has also bought exclusives on patents (e.g. Liquid Metal in consumer electronics) to prevent others from using it, while making no products of their own with it (except a SIM extraction tool in this case).

They've also sold patents they've bought. And in fact at one time created one of the biggest patent holding companies, just for the purpose of licensing / suing other companies that infringed on those patents.
 
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nebo1ss said:
What you seem to ignore is that the companies who filed and held the original patents that Apple violated were too small and underfunded to take on the giant Apple. What they do is sell on the patent to what you have described as a "Troll" but is actually providing a valuable service to small companies who hold patents by compensating them for the original patents and expending their own resources to take on larger companies.
I say keep up the good work and keep large companies honest.
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In theory, yes. But, remember, some of these companies stretch the patent and try to claim that everything under the sun is covered by the initial patent. Which then places a burden on our Court system to figure out what things should be covered, and which should not be. Which, is a tall task for judges with no requisite technical experience.

Patent Trolls also include the companies who threaten suit, and bring suit, in order to induce settlements by parties to walk away with some quick cash. Usually with overreach of a patent in their "collection."
 
This is good. Really shows how stupid the patent system can get.

Not that the Us will ever change anything but.
 
MarkB786 said:
They won't raise prices; they'll just use cheaper parts to make up the difference on the bottom line.
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Really? If Apple does one thing, is it not "using premium parts" to make products? They don't care about the sale price. If they *were* going to raise prices to compensate for a lawsuit (which, I doubt very much they would do), they would not cut the quality.
 
diazj3 said:
which in turn defines the word "irony"... apple does exactly the same thing with patents, so...
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Really? Apple buys up patents for the sole purpose of suing other companies and doesn’t have a single product of its own? I wasn’t aware of that.
 
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timborama said:
Rightly so. Rather than Apple just paying/licensing up front, they choose to cripple Facetime, and end up paying in the end. FaceTime has never worked 100% since then.
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What evidence do you have that Apple changed the patented element of FaceTime in response to an alleged infringement such that they opted to alter the fundamental functionality of a service in order to avoid paying licensing fees? I mean, really now.
 
saudor said:
This is good. Really shows how stupid the patent system can get.

Not that the Us will ever change anything but.
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Right. Never mind Leahy-Smith.
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timborama said:
Hmmm. Where have you been?!? I mean, really now.

https://arstechnica.com/tech-policy...er-breaking-facetime-on-iphone-4-judge-rules/
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It's all Hearsay. Even the news articles that cite "internal emails" are tenuously related. That's a big assertion to base on the fact that something in iOS 6 broke FaceTime and the only fix was to update to iOS 7. . . on the iPhone 4 btw.
 
1984 said:
Really? Apple buys up patents for the sole purpose of suing other companies and doesn’t have a single product of its own? I wasn’t aware of that.
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Apple spent billions buying Nortel patents.

Hundreds, if not thousands of them, were for things like cellular network equipment, semiconductor packaging, and so forth... i.e. fields in which Apple does not make a product.

After extracting the patents they wished for themselves, Apple then helped create a patent holding company. That company made no products. It only consisted of a dozen engineers, whose sole job was finding infringers of those patents, and forcing them into a license or face a lawsuit.

As Apple itself has shown, one does not need to make a product in a patent's field to own and enforce a patent.
 
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macfacts said:
Sounds familiar ...

Like how Ireland makes out like a bandit from Apple's tax avoidance business.
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Not really. Apple has actual presence in Ireland, from Apple stores to R&D and billion dollar data centers. 25% of all Apple European employees are in Ireland.

That's quite a bit different than an empty office.

There probably are multinational companies that keep empty offices in Ireland for tax purposes, so maybe you should use one of those as an example.
 
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