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Apple to lose over $1.1 billion in ‘Dickensian’ patent case

silhouette of a man with an Apple logo in the background
January 26, 2021

Tech giant Apple’s infringement of patented internet security technology could cost it over a billion dollars at the end of a decade-long legal battle, likened by its judge to the interminable Jarndyce v. Jarndyce case in the Charles Dickens novel Bleak House.

In his Jan.15 decision, U.S. Texas District Judge Robert Schroeder denied Apple’s request for a new trial along with other requests. The order could net plaintiff VirnetX over $1.1 billion in damages, after interest and further royalties.

Nevada-based VirnetX first sued Apple in 2010, alleging infringement of four of its patents. The company claims it patented the underlying technology for Apple’s virtual private network (VPN) on-demand offering, as well as secure communications links within FaceTime and iMessage.

VirnetX won the first trial in 2012, and Apple was ordered to pay $368.2 million in damages. The Cupertino, California-based company was granted a retrial, but Judge Schroeder threw out the same, but inflated $625.6 million verdict against it, citing possible confusion with the jury’s damages calculation.

Later that year, a third trial awarded VirnetX $302.4 million, which was upped in 2017 to $439.7 million, on account of enhanced damages, costs, attorneys’ fees, and interest. Like in the latest development in Texas, Apple failed to overturn the verdict. The case covered VirnetX’s ‘211 and ‘504 patents, for which willful infringement had already been determined.

Infringement of the other two VirnetX patents, ‘135 and ‘151, would be determined in 2018. The jury set an 84-cent royalty for every infringing Apple product. This verdict was upheld by Judge Schroeder’s Jan. 15 decision.

Going forward, Apple’s future infringements of the VirnetX patents will cost it 84 cents per unit.

Over the course of its ten-year court battle against one of the largest, most popular companies in the world, VirnetX has been met with accusations of being a patent troll, since it appears to have no revenue source other than patent litigation. In 2013, it withdrew its patent infringement case against Siemens in exchange for a licensing agreement. A year later, VirnetX settled another patent lawsuit against Microsoft for $200 million.

Each case against Apple, Siemens, and Microsoft was filed in Tyler, Texas.

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1. Parola Analytics and Avontis are distinct entities and operate independently. Any references to Avontis or its services do not constitute a legal partnership. 

2. Parola Analytics does not provide legal services. Our services are limited to research and technical analysis. Any information provided by Parola Analytics should not be construed as legal advice.