Apple vs. VirnetX was a prolonged court battle that lasted 10 years. and finally, the case has been settled with a hefty compensation to be paid by Apple. Recently, a jury in Tyler, Texas found the Cupertino tech giant guilty of infringing on VirnetX’s technology that it developed for the United States Central Intelligence Agency with FaceTime feature.
It started in 2010 when VirnetX accused Apple’s FaceTime feature of infringing on VirnetX patents. There had been 2 cases of VirnetX that Apple had been fighting up until 2020.
U.S Court orders Apple to pay $503 million to VirnetX
The second part of the battle between the two companies came to an end on October 30, 2020, when the jury ruled that Apple has to pay VirnetX $502.8 million in royalties for VPN on Demand, a feature that grants users access to virtual private networks.
According to VirnetX, its inventions took roots after a technology they developed for the U.S Central Intelligence Agency and further said that both Apple’s FaceTime features and VPN on Demand were using VirnetX’s inventions.
At first, VirnetX appealed to the jury that it was entitled to $700 million or more, to which Apple countered the offer with about $113 million, claiming that the royalty rate should be no more than 19 cents per unit. The jury concluded on 84 cents per unit.
In a statement to Bloomberg, a spokesperson for the tech giant said that the company is planning to appeal the decision, claiming that the patents on which the case is based were ruled invalid by the patent office:
“We thank the jury for their time and appreciate their consideration but are disappointed with the verdict and plan to appeal. This case has been going on for over a decade, with patents that are unrelated to the core operations of our products and have been found to be invalid by the patent office. Cases like this only serve to stifle innovation and harm consumers.”
In the first case, the court ruled in favor of VirnetX ordering the Cupertino tech giant to pay $302 million in October 2016. However, with other costs and interest included, the evaluation was increased to a final payment of $454,033,859.87.
Apple made an attempt to get the U.S. Supreme Court to hear its appeal, the Supreme Court declined to mediate in February 2020. The tech giant also claimed that many key parts of the patents concerned in this case were canceled by the U.S. Patent and Trademark Office. The courts overturned that cancelation, ordering Apple to pay the damages.
Earlier this year, Apple made two settlements in Korea and United Statement without admission of any wrongdoing to avoid hefty litigation fees. Therefore, it will be interesting to see how the company responds to this ruling which finds it guilty.