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Apple Hit With $368 Million Patent Verdict

Nov 07, 2012 (10:11 AM EST)

Read the Original Article at http://www.informationweek.com/news/showArticle.jhtml?articleID=240062603


Apple One Year After Steve Jobs: Hits And Misses
Apple One Year After Steve Jobs: Hits And Misses
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Apple has been ordered to pay $368.2 million for violating secure communications patents owned by VirnetX Holding Corp., a technology licensing company based in Zephyr Cove, Nev.

A federal jury in Tyler, Texas, a popular venue for patent litigation, decided on Tuesday that Apple's FaceTime videoconferencing technology infringed VirnetX's patents but awarded the company only about half the damages it sought.

Apple did not respond to a request for comment about whether it will appeal the verdict.

The decision shows that the patent sword cuts both ways. In August, Apple was awarded over $1 billion when a jury found that Samsung had infringed Apple's patents. Samsung has appealed. And Apple wants to expand its claims against Samsung: On Wednesday, it asked a judge in the same court hearing a separate patent claim to add Samsung's Galaxy Note 10.1 and Google's Android 4.1 (Jelly Bean) operating system to its complaint.

[ Read Apple Eyes Dumping Intel For ARM. ]

In 2010, Microsoft settled VirnetX's claim over the same technology for $200 million.

VirnetX has pending infringement claims against Avaya, Cisco and Siemens. It recently settled with Aastra, Mitel and NEC. Apple and Cisco last year asked the U.S. Patent and Trademark Office (USPTO) to re-examine VirnetX's patents, in the hope of having them invalidated. Some of these re-examination requests are still pending and could affect the verdict against Apple and VirnetX's infringement claims against other companies.

Microsoft too claimed that VirnetX's patents were invalid. According to the Seattle Post-Intelligencer, the company's expert witness pointed to products from Aventail, a Seattle company acquired by SonicWALL, as prior art that had been missed by the USPTO. However, the USPTO re-examination found the patents valid and Microsoft ended up settling.

In September, VirnetX renewed its complaint to the International Trade Commission to ban the sale of Apple's iPhone, iPod, iPad, and Mac computers. VirnetX says that case is expected to go to trial next year. If VirnetX succeeds in its ITC claim and wins an injunction, Apple will have to settle.