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April 12, 2018

Apple slapped with $502.6 million in damages in ongoing battle with VirnetX

by John_A

The Apple patent saga continues. Apple has been ordered by a federal judge in Texas to pay VirnetX, which is often considered to be a patent troll, a whopping $502.6 million. This is just the latest news in an eight-year-long battle that began in 2010 and is likely to continue further.

The original suit was filed in 2010 when VirnetX claimed that Apple had infringed on four patents related to online communications — specifically used in apps like FaceTime and iMessage. Since then, we have seen a number of appeals, multiple suits and countersuits, and so on. The previous appeal was in October 2017, when Apple was ordered to pay $439.7 million.

“The evidence was clear,” VirnetX CEO Kendall Larson told reporters after the announcement. “Tell the truth and you don’t have to worry about anything.”

VirnetX, as a company, is considered by many to be a so-called “patent troll,” which basically means that its entire business consists of taking companies that actually build products to court based on relatively loose interpretations of patent laws. As The Verge notes, while VirnetX is based in Nevada, the suit was specifically filed in east Texas, which is a little more patent troll-friendly than Nevada. VirnetX admits its business model is based on patents in its SEC filing, which notes that its “portfolio of intellectual property is the foundation of our business model.” In 2017, the Supreme Court ruled that patent holders can no longer choose where they file their lawsuits.

Still, the Supreme Court has been cracking down on patent trolls, and because of that, it’s possible that the ruling will eventually be struck down. The Patent Trial and Appeal Board has also said that the patents are invalid, meaning that VirnetX’s victory could be very short-lived. After the decision was announced, VirnetX’s stock rose by around 44 percent, according to a report from Bloomberg, though Apple’s stock remained largely the same — which is likely due to the fact that $502.6 million is nothing compared to Apple’s overall profits.

If VirnetX does win the suit, it will represent a massive increase in the company’s bottom line. In 2017, VirnetX reported only $1 million in revenue.

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