Apple Inc. (AAPL) To Pay VirnetX $368.2m Over Patent Infringement

Apple Inc. (AAPL) To Pay VirnetX $368.2m Over Patent Infringement
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In yet another courtroom battle over patents, and involving Apple Inc. (NASDAQ:AAPL), an East Texas jury has ordered the iPhone maker to pay $368.2 million in damages to patent holding company VirnetX Holding Corporation (NYSEAMEX:VHC).

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Apple Inc. (AAPL) To Pay VirnetX $368.2m Over Patent Infringement

The case relates to a claim made by VirnetX Holding Corporation (NYSEAMEX:VHC), alleging Apple Inc. (NASDAQ:AAPL) infringed on a range of its patents used in a number of its services, including FaceTime.  The case targeted Apple’s iPhone, iPod Touch, and iPad, as well as Mac computers that use the FaceTime function. As per the reports, VirnetX was expecting at least $900 million from the tech giant as damages.

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VirnetX Holding Corporation (NYSEAMEX:VHC) has a fine track record of winning large patent cases against big firms.  In May 2010, the software giant, Microsoft Corporation (NASDAQ:MSFT), paid a hefty fine of $200 million for infringing two patents connected to the virtual private network technology used in Microsoft’s Windows and Office communication server products. Currently, VirnetX has cases going on against Cisco and Avaya. Owing to its winning track record, VirnetX had licensing agreements with a number of firms in the past, including NEC and phone systems-maker Mitel. It also has a separate patent case pending against Apple Inc. (NASDAQ:AAPL) at the U.S. International Trade Commission in Washington.

Apple Inc. (NASDAQ:AAPL)’s lawyer, Danny Williams, told the jury “Apple does not owe money to VirnetX” and added “VirnetX is not entitled to money for things they did not invent. The VirnetX technology, if used, is a small part of very large, complex products”.

In closing statements, Virnet’s lawyer Doug Cawley said: “For years Apple refused to pay fair value for the VirnetX patents. Apple Inc. (NASDAQ:AAPL) says they don’t infringe. But Apple developers testified that they didn’t pay any attention to anyone’s patents when developing their system”.

According to VirnetX, the technology in question was developed from work performed by SAIC Inc. for the U.S. Central Intelligence Agency to develop secure communications. VirnetX, formed by former employees of SAIC, was named as a party in the complaint though it isn’t participating. According to VirnetX’s regulatory filings, Virginia-based SAIC may be entitled to a share of any verdict or settlement.

The case has got so much publicity that the judge had to order the parties involved to ask their investors to stop calling the court, which is receiving more than 10 calls a day.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at
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