IP Law Daily Texas jury awards VirnetX $625.6 million from Apple
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Thursday, February 4, 2016

Texas jury awards VirnetX $625.6 million from Apple

By Peter Reap, J.D., LL.M.

A jury in the federal district court in Tyler, Texas, yesterday awarded VirnetX $625.6 million in damages, stemming from Apple’s infringement of four asserted VirnetX patents by Apple’s VPN on Demand, Face Time System, and iMessage software applications (VirnetX Inc. v. Apple Inc., February 3, 2016).

VirnetX filed an initial suit against Apple in the federal district court in Tyler Texas in 2010. VirnetX asserted in that suit that Apple’s servers running its “FaceTime” application infringed certain claims of U.S. Patent Nos. 7,418,504 (the ’504 patent) and 7,921,211 (the ’211 patent). It also accused Apple’s “VPN On Demand” feature of infringing certain claims of U.S. Patent Nos. 6,502,135 (the’135 patent) and 7,490,151 (the ’151 patent). The patents claim technology for providing security over networks such as the Internet.

In November 2012, a jury found that Apple infringed all four asserted patents. It awarded damages to VirnetX, Inc. and SAIC in the amount of $368.2 million, representing the amount of a reasonable royalty license VirnetX would have received. The jury also found that none of the infringed claims were invalid. Apple moved for judgment as a matter of law (“JMOL”) or, alternatively, for a new trial or remittitur. The district court denied both motions and Apple appealed.

In September 2014, the Federal Circuit vacated the jury’s $368.2 million damage award to VirnetX because VirnetX’s damages expert used flawed methodologies in determining the correct royalty base and in calculating a hypothetical reasonable royalty rate.

The same day the jury returned the above verdict, VirnetX filed the instant suit with a new complaint against Apple for infringing the same four patents. This complaint targeted newer generation Apple products that were not included in the first lawsuit—Apple’s iPhone 5, iPod Touch 5th Generation, iPad 4th Generation, iPad mini, and all Apple computers running the Mountain Lion operating system.

As noted in yesterday’s verdict, Apple did not contest that the Original Version of VPN on Demand infringed the ’135 and ’151 patents. The jury concluded that $334.9 million would fairly and reasonably compensate VirnetX for this infringement.

In addition, the jury found that Apple’s 2013 Version of VPN on Demand infringed the ’135 and ’151 patents, and, that Apple’s Original Version of the FaceTime System, Apple’s 2013 Version of the FaceTime System, and Apple’s iMessage feature infringed the ’504 and ’211 patents. The jury determined that the sum of $290.7 million would fairly and reasonably compensate VirnetX for this infringement.

Finally, the jury determined that certain of Apple’s infringement involving VPN on Demand and the FaceTime System was willful.

The case is No. 6:12-cv-00855-RWS.

Attorneys: Bradley Wayne Caldwell (Caldwell Cassady & Curry, PC) for VirnetX Inc. Michael E. Jones (Potter Minton PC) for Apple Inc.

Companies: VirnetX Inc.; Apple Inc.

MainStory: TopStory Patent TexasNews

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