| Title | After Five Losses, Apple Finally Wins A Round In $600M Virnetx Facetime Patent Mega-Battle | |
| Date | Saturday November 30 2019, @09:46PM | |
| Author | janrinok | |
| Topic | ||
| from the this-case-still-has-legs dept. | ||
Arthur T Knackerbracket has found the following story:
Apple has won the latest round in its nine-year patent mega-battle with VirnetX – with a US appeals court rejecting a $600m jury decision and sending it back down to the district court to redecide.
The victory saw Apple’s share price go up by more than one per cent but, in an indication of their comparative sizes, VirnetX’s share price collapsed by 50 per cent on news of the decision [PDF] on Friday. As everyone has had time to digest the decision, however, VirnetX’s share price has partially recovered – in large part because Apple is still on the hook for most of the $600m award.
The lower court will now have to decide whether to hold another trial and revisit the whole issue or revise its patent award in light of the successful appeal.
At the heart of the fight are four patents that VirnetX holds that it says Apple infringes with its iPhones and iPads. All of them cover VPNs but the most recent court decision split the four in two groups, with one covering external domain names and the other covering internal network addressing.
The court decided that the first two (6,502,135 and 7,490,151) are infringed by Apple in its VPN on Demand service but that the second two (7,418,504 and 7,921,211) which are used in its popular FaceTime service are not.
That’s important for several reasons. For one, rather than pay VirnetX royalties, Apple decided to redesign how it did FaceTime on a technical level as a way to bypass the patents (in essence, it stopped using an IP address as final authorization when creating a VPN between two devices and instead uses a push token, certificate and session token). That redesign sparked its own lawsuit when Apple cut users off from FaceTime if they didn’t update their phones to use the new approach.
By negating infringement of two of the four patents, it also means that Apple will not have to pay as high an infringement fine – but it’s not at all clear what that reduction will be. Despite FaceTime being much better known, it is significantly less valuable in terms of infringement than VPN on Demand.
Currently the $596m judgement against Apple comprises a $503m award and $93m in interest and costs – tacked on because Apple has been dragging the case out; VirnetX first sued back in 2010. That award was reached by putting a $1.20 royalty for the company on the estimated 384 million units impacted.
But, the judgment notes, Apple’s own expert “asserted that VPN on Demand was vastly more valuable than FaceTime, (testifying that VPN on Demand was worth about 6 cents per unit, FaceTime about 1 cent per unit).”
That means that – if the district court accepts the decision and tries to recalculate the fine itself using Apple’s own testimony – the $596m judgment will be reduced to approximately $515m. Which, even for Apple, is a lot of money.
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printed from SoylentNews, After Five Losses, Apple Finally Wins A Round In $600M Virnetx Facetime Patent Mega-Battle on 2024-04-23 09:48:38