Big Win for Doug Cawley/McCool Smith on behalf of VHC v. AAPL
Apple Ordered To Pay $370 Million Because Its Engineers Ignored Patents When They Built FaceTime
VirnetX Holding Corp. was awarded $368.2 million after a federal jury yesterday said Apple Inc. infringed its patents for virtual-private-network technology used in Apple’s FaceTime video-calling function.
VirnetX, which won a $200 million settlement from Microsoft Corp. in 2010, accused Apple of infringing four patents related to private networks. The case targeted Apple’s iPhone, iPod Touch and iPad as well as Mac computers that use the FaceTime function. Apple denied infringing the patents and contends they’re invalid.
The VirnetX patents cover the use of a domain-name service to set up virtual private networks, through which a website owner can interact with customers in a secure way or an employee can work at home and get access to a company’s electronic files. VirnetX had sought $708 million in damages.
“For years Apple refused to pay fair value for the VirnetX patents,” Doug Cawley, a lawyer with McKool Smith in Dallas who represents VirnetX, said in closing arguments. “Apple says they don’t infringe. But Apple developers testified that they didn’t pay any attention to anyone’s patents when developing their system.”
Following the verdict, Cawley said VirnetX would seek an order to block further use of its inventions. Kristin Huguet, a spokeswoman for Apple, said yesterday the company had no comment.
The focus of the trial before U.S. District Judge Leonard Davis was on Apple’s FaceTime, which lets people use Mac computers to make video calls to an iPhone, iPod Touch or iPad. The Cupertino, California-based company said it used a different technology than what was covered by the VirnetX patents.
“Apple does not owe money to VirnetX,” Danny Williams, a lawyer with Williams, Morgan & Amerson in Houston who represents Apple, told the jury. “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.”
The case has received so much attention that Davis ordered the parties on Oct. 19 to tell their investors to stop calling the court. He said in a court filing that his office is receiving more than 10 calls a day.
The technology stemmed from work performed by SAIC Inc. for the U.S. Central Intelligence Agency to develop secure communications, VirnetX has said. VirnetX, based in Zephyr Cove, Nevada, was formed by former employees of SAIC, which was named as a party in the complaint though isn’t participating. According to VirnetX regulatory filings, McLean, Virginia-based SAIC may be entitled to a share of any verdict or settlement.
VirnetX reported $36,000 in revenue from royalties in the first half of this year. Its shares have gained 5.3 percent this year through the New York close yesterday, giving the company a $1.34 billion market value.
VirnetX has a separate patent case pending against Apple at the U.S. International Trade Commission in Washington. It also has claims against Cisco Systems Inc., Avaya Inc. and Siemens Enterprise Communications GmbH that are scheduled for trial in March. Siemens Enterprise is a venture by Siemens AG and closely held Gores Group.
The case at trial is VirnetX Inc. v. Cisco Systems Inc., 10cv417, U.S. District Court for the Eastern District of Texas (Tyler
and demonstrates how full of it skibum and others were when they argued over and over again on this board that a major company can get away with ignoring other's patents while developing the same technolgy and that they are trained not to look and thus insulated somehow from liability ... guess it's not that simple, eh? you phoney "lawyer"
C'mon Todd, show a fellow long some love! Like you, I'm now cheering for PRKR success!
But I can't just let idiotic statements like yours go by, no matter how much it is against my economic interests. You completely miss two points: one big, one small.
The small point: no one has ever said that ignoring another company's patents has a bearing on infringement, that goes to the issue of whether any infringement is willful. As I said a while back, it is standard practice for companies to avoid looking at the patents held by others so as to avoid being found to be willfully infringing. AFAIK Apple wasn't held to willfully infringe in this case (though I admit that I haven't looked too deeply - I'm sure you'll correct me if I'm wrong).
The big point: does it escape your notice that VirnetX successfully proved that the two richest tech companies in the world - Apple and Microsoft - infringed several patents in some core functionality in their biggest selling products (which products sell for hundreds of dollars each), and came away with a total of $570M? And that assumes the Apple verdict stands up on appeal. Now, tell me again how the PRKR case against QCOM will be worth billions? How do you justify the stock price?