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U.S. Patent and Trademark Office had canceled "key parts" of many of the patents involved in the case, but the courts rescinded that cancelation, leaving Apple responsible for the $440 million payment.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
18 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
18 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
18 months ago
Virnetx readying their next set of their master patent troll plan
Score: 4 Votes (Like | Disagree)
Carnegie Avatar
18 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
18 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
18 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

Flat 2021 MacBook Pro Mockup Feature

Unreleased Apple Macs and Apple Watches Listed in Eurasian Database Ahead of Fall Product Launches

Monday August 2, 2021 9:34 am PDT by
Apple is preparing for a slew of fall product launches according to new filings that showed up today in the Eurasian Economic Commission database. There are listings for new Mac and Apple Watch models, all of which have previously unknown model identifiers that indicate that they're upcoming devices. There are six new Apple Watch identifiers, including A2473, A2474, A2475, A2476, A2477, and...
ifixit iphone12 mini

Apple to Make Space for Larger Batteries in iPhones, iPads, and MacBooks By Adopting Slimmer Peripheral Chips

Monday August 2, 2021 2:12 am PDT by
For future iPhones, iPads, and MacBooks, Apple plans to use smaller internal components in an effort to increase the size of the device's battery, according to DigiTimes. Image Credit: iFixit Specifically, Apple plans to "significantly increase the adoption" of IPDs or integrated passive devices for the peripheral chips in its products. These news chips will be slimmer in size and allow for...
Apple watch series 5 new case material made of titanium 091019

Titanium Apple Watch Series 6 Models Currently Widely Unavailable

Sunday August 1, 2021 6:21 am PDT by
Models of the Apple Watch Series 6 with titanium cases part of the "Apple Watch Edition" collection is currently widely unavailable for pick-up in several of Apple's retail stores in the United States and is unavailable entirely for delivery in major markets. Noted by Bloomberg's Mark Gurman in the latest edition of his "Power On" newsletter, titanium models of the Apple Watch Series 6,...
General Apps Messages

Android iMessage Competitor Puts Pressure on Apple

Friday July 30, 2021 3:15 am PDT by
Google and the three major U.S. carriers, including Verizon, AT&T, and T-Mobile, will all support a new communications protocol on Android smartphones starting in 2022, a move that puts pressure on Apple to adopt a new cross-platform messaging standard and may present a challenge to iMessage. Verizon recently announced that it is planning to adopt Messages by Google as its default messaging...
REC ASA CODE2016 20160601 205816 2745

Elon Musk Reportedly Demanded to Become Apple CEO as Part of Potential Tesla Acquisition [Update: Musk Denies]

Friday July 30, 2021 9:04 am PDT by
Tesla CEO Elon Musk reportedly once demanded that he be made Apple CEO in a brief discussion of a potential acquisition with Apple's current CEO, Tim Cook. The claim comes in a new book titled "Power Play: Tesla, Elon Musk and the Bet of the Century," as reviewed by The Los Angeles Times. According to the book, during a 2016 phone call between Musk and Cook that touched on the possibility of ...
iPhone 13 Wi Fi 6E feature update

Wi-Fi 6E Explained: What It Could Mean for iPhone 13 and Beyond

Monday August 2, 2021 8:00 am PDT by
The iPhone 13 is widely expected to come with Wi-Fi 6E capabilities, and while it may seem rather nuanced to the average consumer, with only improved speeds and being "up to date" in the realm of Wi-Fi technology, it's actually a fairly significant improvement, laying the groundwork for much of what we know the future holds. To truly understand Wi-Fi 6E, MacRumors sat down for an exclusive...
magic keyboard touch id

Apple Makes Magic Keyboard With Touch ID Available for Separate Purchase

Tuesday August 3, 2021 5:22 am PDT by
Apple has made the Magic Keyboard with Touch ID, which previously was only available with the purchase of the new 24-inch iMac, available for purchase individually for $149. Apple also retails the Magic Keyboard with Touch ID and a numeric keypad for $179. A standard Magic Keyboard without Touch ID or a numeric keypad is available for $99, and a new Magic Trackpad for $129. One major...
themorningshowcarrell

Apple Decided Not to Buy Reese Witherspoon's 'Hello Sunshine' Media Company

Monday August 2, 2021 2:02 pm PDT by
Reese Witherspoon's media company "Hello Sunshine" recently courted various buyers, and while Apple was one of parties interested in buying Hello Sunshine, the Cupertino company did not end up going through with the purchase. Hello Sunshine was valued at around $900 million thanks to its involvement in popular series like The Morning Show," "Big Little Lies," and "Little Fires Everywhere,"...
COVID19 Digital Wallet Apple Wallet

Australian Government Now Offering COVID-19 Digital Vaccination Certificates for Apple Wallet

Monday August 2, 2021 12:04 am PDT by
The Australian government has introduced support for adding COVID-19 vaccination digital certificates to Apple Wallet via the Express Plus Medicare app on iOS. Image credit: Tap Down Under As spotted by Tap Down Under, users who have received two doses of either the AstraZeneca or Pfizer vaccine now have access to the digital certificate through their Medicare online account or via the Medica...
mac pro new graphics

Apple Introduces New High-End Graphics Options for Mac Pro

Tuesday August 3, 2021 7:34 am PDT by
Apple today began offering new high-end graphics upgrade options for both the tower and rack versions of the Mac Pro desktop computer. This comes on the same day that Apple started selling the Magic Keyboard with Touch ID on a standalone basis. As noted by CNN Underscored's Jake Krol, the Mac Pro can now be configured with new AMD Radeon Pro W6800X, W6800X Duo, or W6900X graphics when...