Apple Pays VirnetX $454 Million for Patent Infringement After U.S. Supreme Court Refuses to Hear Apple's Appeal

Apple has paid VirnetX a total of $454,033,859.87 following the conclusion of a long-running patent infringement battle, VirnetX announced today.

virnetx apple
The patent dispute between VirnetX and Apple dates back to 2010 when VirnetX accused Apple's FaceTime feature of infringing on its intellectual property, and there are multiple lawsuits involved.

In this particular case, Apple was ordered to pay $302 million in October 2016, but with interest and other costs included, the judgement was increased to $440 million. Though Apple appealed the $440 million award many times, courts have continually ruled in VirnetX's favor.

Most recently, Apple attempted to get the U.S. Supreme Court to hear its appeal, but the Supreme Court in February 2020 declined to intervene.

Apple claimed that the U.S. Patent and Trademark Office had canceled "key parts" of many of the patents involved in the case, but the courts rescinded that cancelation, leaving Apple responsible for the $440 million payment.

This is just one of two VirnetX cases that Apple has been fighting. In the second case, VirnetX was awarded $502 million, but the ruling was partially overturned last year and sent back to the lower courts to determine new damages. Apple in February attempted to get a rehearing to determine patent validity, but was denied.

Top Rated Comments

Art Mark Avatar
11 months ago
They are a joke of a company - Virnetz...more like a Virus than some other things out there.
Score: 5 Votes (Like | Disagree)
eoblaed Avatar
11 months ago
I can see someone filling that out: "... and eighty .. seven .. cents."

Wow, that's big check to write.
Score: 4 Votes (Like | Disagree)
farewelwilliams Avatar
11 months ago
Virnetx readying their next set of their master patent troll plan
Score: 4 Votes (Like | Disagree)
Carnegie Avatar
11 months ago


Kinda wonder how much actual revenue the company has made compared to how much they've won in lawsuits.

VirnetX has very little revenue on a year-to-year basis. It's had less than $10 million total over the last 10 reported years. It loses $10-30 million every year.

It's managed to survive with money it received in 2014 and 2010 from settling with Microsoft ($223 million total) and with paid-in capital. It won't even get to keep all of this payment from Apple. It effectively bought the rights to the IP in question and has to pay part of what it generates from that IP to the previous owner.

The company's share price has basically reflected the market's assessment of what it will be able to get from Apple in these lawsuits. Those actions aside, the company really isn't worth much. So you consider the likelihood that VirnetX will ultimately get paid from those actions, and how much it's likely to get paid, and factor in expenses it will have... and you get an assessment of its value.

That's why its market cap is still only a little over $400 million, even though it got this payment and has won another judgment against Apple (though the damages in that case have to be reconsidered). It's also why its share price wasn't being hit like many other equities were in the broader market sell off.

...

Most recently, Apple attempted to get the U.S. Supreme Court to hear its appeal ('https://www.macrumors.com/2020/02/24/u-s-supreme-court-appeal-440-million-virnetx-case/'), but the Supreme Court in February 2020 declined to intervene.

Apple claimed that the U.S. Patent and Trademark Office had canceled "key parts" of many of the patents involved in the case, but the courts rescinded that cancelation, leaving Apple responsible for the $440 million payment.

...

The court (i.e. the Federal Circuit) had not rescinded the cancelation of the patents (i.e. patent claims) at issue in the petition to the Supreme Court. The Federal Circuit had upheld the invalidation of those patents. (There were invalidations of 2 other patents which the Federal Circuit sent back to the PTAB to be reconsidered.) Those patents, which are part of what Apple was found to have infringed and ordered to pay damages base on (in the first case, for which it has now paid the judgment), are still invalid. But Apple has had to pay damages based on them regardless.

Part of what Apple wanted the Supreme Court to do was give effect to the invalidation of those patents, or instruct the Federal Circuit to consider whether it should give effect to those invalidations, in the infringement case we're talking about.
Score: 4 Votes (Like | Disagree)
cmaier Avatar
11 months ago


Your time wasn't wasted. I learned a few things along the way.

Thanks for letting me know. I sort of gave up :-)
Score: 3 Votes (Like | Disagree)
zorinlynx Avatar
11 months ago
It's odd that this hasn't affected AAPL stock price much. $454 million is a whole...

400th...

of its cash hoard. Nevermind. I started writing this post before I looked up the numbers and can't believe just how massive AAPL is.


Odd thing to call a company that just received a check for $454 Million.

How much debt do they already have? It may not be that much in the end. After all they've been fighting this lawsuit for a while.


Apple tends to fight-to-the-death on stuff like this when other companies just pay the licensing fee. I don't know if that attitude comes from the top or from the legal department. Apple's lawyers have got to know when to hold 'em and when to fold 'em so I suspect top management or Cook himself orders them to soldier on even if they know the game is over.

It's because a lot of times these patents are ********.

Some method of doing something gets patented, but not used for anything. Then a company like Apple comes up with the same tech independently and makes an actual product. Then they get sued for it.

I'm not saying that's the case here, just saying it's important to defend yourself against lawsuits from these companies that just stockpile patents and don't make anything with them. You never know what might be buried in some patent when coming up with a new (to you) way of doing something.
Score: 3 Votes (Like | Disagree)

Top Stories

cook cbs this morning

CBS This Morning: Apple to Make 'Big Announcement' Tomorrow Morning

Tuesday January 12, 2021 8:46 am PST by
CBS This Morning today shared a short clip of an upcoming interview with Apple CEO Tim Cook in which addressing last week's events at the U.S. Capitol, with Cook saying "it's key that people be held accountable for it." Following the clip, Gayle King of CBS noted that the interview with Cook was not specifically arranged to address the current controversy over Parler and other repercussions, ...
ipad pro 2021 mysmartprice cad

Allegedly Leaked 2021 iPad Pro CAD Images Suggest Few Design Changes

Tuesday January 12, 2021 3:38 am PST by
Tech blogs 91mobile and MySmartPrice on Tuesday posted a series of allegedly leaked factory CAD images of Apple's upcoming fifth-generation 11-inch iPad Pro. Rumors suggest Apple plans to announce two new iPad Pro models in both 11-inch and 12.9-inch versions, and today's images offer perhaps the clearest indication yet that Apple's next-generation iPad Pros will have minimal, if any,...
prototype iphone 12 pro

Prototype iPhone 12 Pro Shown Off in Photos

Wednesday January 13, 2021 3:39 pm PST by
Developer Giulio Zompetti, who often shows off prototype versions of Apple devices, today highlighted a prototype version of the iPhone 12 Pro. The iPhone 12 Pro is running an operating system called SwitchBoard, a nonUI version of the iOS 14 update that Apple uses internally. We've seen SwitchBoard on prototype devices before, as Apple uses it to test new features. Zompetti's prototype...
find my app safari post

Safari Allows Users to Enable Hidden 'Items' Tab in 'Find My' App Ahead of AirTags Launch

Wednesday January 13, 2021 5:45 am PST by
As seen in screenshots obtained by MacRumors in 2019, Apple's long-rumored AirTags items trackers are expected to be managed through the Find My app on iPhone, iPad, and Mac. Now, any user can get an early look at this tab. MacRumors reader David Chu today alerted us that the hidden "Items" tab in the Find My app can be enabled on an iPhone or iPad by typing in the link findmy://items in...
iphone x camera close

iOS 14.4 Will Introduce Warning on iPhones With Non-Genuine Cameras

Thursday January 14, 2021 8:07 am PST by
In the second beta of iOS 14.4 seeded to developers and public testers this week, MacRumors contributor Steve Moser has discovered code indicating that Apple will be introducing a new warning on iPhones that have had their camera repaired or replaced with aftermarket components rather than genuine Apple components. "Unable to verify this iPhone has a genuine Apple camera," the message will...
mac anti reflective coating issue

Apple's Anti-Reflective Coating Repair Program Still in Effect for Some MacBooks With New Mail-In Policy

Tuesday January 12, 2021 10:07 am PST by
In an internal memo obtained by MacRumors, Apple recently informed its network of Apple Authorized Service Providers that mail-in repair is now required for Mac notebooks with anti-reflective coating issues in the United States. The new policy went into effect January 4, 2021 and means that customers who take an eligible 12-inch MacBook or MacBook Pro exhibiting this issue to an Apple...
pioneer carplay wc5700nex

The Best Apple-Related Accessories at CES 2021

Wednesday January 13, 2021 1:16 pm PST by
CES 2021 is taking place digitally this year, and it hasn't been as exciting as in past years because many vendors have opted out. That said, some companies are still showing off some interesting Apple-related accessories that are coming out this year and that will be of interest to Mac, iPad, and iPhone users. Subscribe to the MacRumors YouTube channel for more videos. Pioneer Wireless...
Hue module dimmer switch

Philips Hue Announces New Wall Switch Module, Dimmer Switch, and Outdoor Light Bar

Thursday January 14, 2021 3:11 am PST by
Philips Hue has announced a new wireless dimmer switch module that lets Hue bridge owners directly control the smart lighting from their standard wall switches. The new Philips Hue wall switch module is the ideal addition to any Philips Hue set up. Installed behind existing light switches, it allows users to turn their existing switch into a smart switch and ensures their smart lighting is...
whatsapp wallpapers 1

WhatsApp Affirms User Privacy Following Backlash Over Data Sharing With Facebook

Tuesday January 12, 2021 6:39 am PST by
Following backlash after changing its terms and privacy policy to consolidate a significant amount of data sharing with Facebook, WhatsApp is now assuring users about the privacy measures built into its app. Last week, WhatsApp began informing users of updates to the app's terms of service and privacy policy. The updated agreements, which users must consent to in order to continue using...
apple racial equity justice initiative propel center render 01132021

Apple Launches New Nationwide Racial Equity and Justice Initiative Projects

Wednesday January 13, 2021 4:08 am PST by
Apple today announced a set of new projects as part of its $100 million Racial Equity and Justice Initiative (REJI) to help dismantle systemic barriers to opportunity and combat injustices faced by communities of color. Rendering of the Propel Center The projects include the Propel Center, a global innovation and learning hub for Historically Black Colleges and Universities (HBCUs), an Apple ...