sorry also to be fair they were critical of VHC experts method for the smallest salable unit because he did not consider the $29 mac OS upgrade costs in the SSU. They also did not have an issue with the Royalty Rate of 1% based on the 6 licensing examples - it ends up basically being a FRAND license.
Yes the parts of the trial that were affirmed are done, the parts that were remanded will be heard again, the ones that are reversed are out. So Apple are still in violation of multiple patents and claims - that was affirmed however the damages were vacated because CAFC felt the judge did not explain the market rule properly to the Jury - this PART of the trial must be done again.
Correct. Facetime DOES STILL infringe on the 211 and 504 patents. The first argument on anonymity is going to be heard again with the new claims construction but the second argument will not - the CAFC court agreed with VHC. Apple using NAT (Network Address Translation) still create a "direct communications link" - we only need one not both - multiple claims are still infringed.
Not only for Enterprise computing!. The VPN on demand features were made part of the the operating systems network stack in IOS, they cannot just remove it. Why? Because they opened it up for 3rd party developers that needed VPN functionality using an API. So all the people developing not only Enterprise Software BUT ALSO Apps for the App store MAY use VPN on demand features in call back systems. What are "call back" systems - things like users usage, access to credentials, access to shared data (used a lot in gaming) access to shared storage, virtual wallets, getting unique server generated tokens for tokenization, accessing encryption keys in PKI applications and the list goes on and on. The only way to remain secure is to encrypt your data via a VPN. The question know is how many people use it? I hope Apple are asked to provide that number, I think most IOS programmers do because its easier to just use Apples API than write another VPN client from scratch.
Please see my post - "FT stills infringes the 504 and 211 - just not all claims" for a detailed breakdown.
The claims construction changes MIGHT impact the first argument on anonymity if Apple do prove to a lower court they DO NOT USE anonymity. This is ironic because if Apple did implement (it is not) without it, it would mean that Facetime is not secure or anonymous by Apples own definition - a strange argument to make.
However even if they do win the first argument on anonymity they still loose the second argument and are infringing on the claim of Direct Communication Link. CAFC said in their ruling yesterday that Network Address translation NAT used by Apples infrastructure routers does not mean they no longer have a direct communication link. So the second argument is still valid for VHC and admissible in court (this went against Apple) and so are any claims on the 504 and 211 that support the direct communication link.
Direct communication is one of the claims - if we get it it will not matter about the new claims construction for the first argument, get my point? VHC just need one and the claims construction language did not change on the second argument thus making it still valid for the lower court.
Not correct - CAFC did not argue the RR they agreed wit the 1% its the basis thats needs to be determined. They also DID NOT say a $29 upgrade costs should be that base only that it was not considered by VHC. They are leaving that to the lower court. VHC may need to introduce market comparisons from other security companies that provide software NAC's and with management servers. Enterprise security is actually very expensive software.
Anyway my point was on the Patnets not the damages. The 504 and 211 re not being tossed out, only ONE aspect needs to be reconsidered by the lower court and not both, as I stated below even if Apple do win on the first argument how will they win on the second when their own experts and the CAFC court agree with VHC. This is a direct quote from CFAC on the 504 and 211 second argument...
"The district court concluded that there was substantial evidence to support the jury’s finding that the NAT routers used by FaceTime do not impede direct communication, VirnetX, 925 F. Supp. 2d at 831, and we agree. As the district court noted, VirnetX’s expert testified that the NAT routers still allow for “end-to-end communication between the two devices,” J.A. 1565, because they merely translate addresses from the public address space to the private address space, but do not terminate the connection. J.A. 1465, 1536–37.
Even Apple’s expert admitted that the connection does not stop at the NAT routers. [THATS A HUGE ISSUE - ITS THEIR EXPERT]. Apple argues that this testimony cannot support a finding of infringement because it is inconsistent with the court’s claim construction that required “direct addressability.” Appellant’s Br. 43–45. But the district court considered this argument and disagreed, noting that its claim construction expressly provided that “routers, firewalls, and similar servers . . . do not impede ‘direct’ communication,” and VirnetX presented evidence that NATs operate like routers or firewalls. VirnetX, 925 F. Supp. 2d at 831.
Thus, we do not think the district court erred in finding that there was substantial evidence on which the jury
could have relied to reach its finding of infringement on this element. [CAFC JUST GAVE VHC THEIR CLAIM AND WE ONLY NEED ONE NOT BOTH].
People really need to start reading the legal briefs. There is more good news for longs on FT. I put my commnets in [ ] the rest is from the court brief...
’504 and ’211 Patents Apple argues that there was not substantial evidence to support the jury’s verdict that its FaceTime servers infringe the asserted claims of the ’504 and ’211 patents.
[FIRST ARGUMENT] Apple insists that FaceTime does not infringe the “secure communication link” claim term for two reasons: first,because when properly construed it requires anonymity, which the FaceTime servers do not provide, and [SECOND ARGUMENT] second, because they do not provide “direct” communication, as required by the district court’s claim construction [THIS IS STILL A PROBLEM FOR APPLE - REMEMBER WE ONLY NEED ONE CLAIM NOT BOTH].
With respect to the first argument, we have now construed the disputed claim term so as to require anonymity.
See supra at 13. However, the jury was not presented with the question of whether FaceTime infringes
the asserted claims under a construction requiring anonymity. Thus, we remand for further proceedings to
determine whether Apple’s FaceTime servers provide anonymity. [APPLE WINS THAT ONE] but...
With respect to the second argument, Apple argues that FaceTime servers do not provide “direct” communication because the communications are addressed to a NAT, rather than to the receiving device. Appellant’s Br. 43. The district court concluded that there was substantial evidence to support the jury’s finding that the NAT routers used by FaceTime do not impede direct communication, VirnetX, 925 F. Supp. 2d at 831, and we agree. As the district court noted, VirnetX’s expert testified that the NAT routers still allow for “end-to-end communication between the two devices,” J.A. 1565, because they merely translate addresses from the public address space to the private address space, but do not terminate the connection. J.A. 1465, 1536–37.
See my next post.
The USCAFC affirmed the jury's finding that all 4 of VirnetX's patents are valid, confirmed the jury's finding of infringement of VPN on Demand under many of the asserted claims of the '135 and '151 patents, and confirmed the district's court's decision to allow evidence concerning the VirnetX's licenses and royalty rates in connection with the determination of damages.
That is not a legal argument or valid analysis and many people would step in before that happens. Please provide a valid argument how Apple will overcome multiple AFFIRMED infringing claims on the 135 patent? How will Apple defend willful infringement in the second case? We still know there will be damages VHC just need a better argument for the entire market value damages argument. Apple also will need to provide something. I bet VHC use Samsung case which would put the PPU at around $6.
On the RR. The 1% RR is basically a FRAND license and will most likely be argued as such, please read pages 32, 33 and 34 and make your case against the 1%.
Read pages 32,33 and 34 and tell me your legal analysis on royalty rate. The market is reacting to the damages now going to be lower. However the damages will still be very significant for a tiny company BUT WHAT MATTERS to APPLE is the royalty rate of 1% is HUGE and that all their products ARE STILL infringing the 135. Not good for future suits because VHC now knows what will hold up at CAFC.
People are missing it, the royalty rate is GOOD - see pages 32, 33 and 34 of the decision. This means CAFC are upholding a 1% royalty and cited case law to say why it makes sense in this case.
"With those principles in mind, we conclude that the district court here did not abuse its discretion in permitting
Weinstein to rely on the six challenged licenses. To begin with, four of those licenses did indeed relate to the
actual patents-in-suit, while the others were drawn to related technology. Moreover, all of the other differences
that Apple complains of were presented to the jury, allowing the jury to fully evaluate the relevance of the licenses. See J.A. 1600, 1650, 1678–82. No more is required in these circumstances (a lot of case law cited and then....Thus, we do not believe the district court abused its discretion by permitting Weinstein’s testimony regarding the proper royalty rate based on these allegedly comparable licenses."
1. Apple are STILL infringing on the 135 Patent (we have two more lawsuit with Apple on the 135).
2. Damages were vacated because of an erroneous Jury instruction on the entire market value rule NOT the ROYALTY RATE of damages (see #3 below). That means ONLY the damages portion of the trial will be heard again by the district court.
and now for the good news...
3. The CAFC court DID NOT find the first damages argument on ROYALTY RATE to be invalid, here is what they actually said...
After determining the royalty base, Weinstein applied a 1% royalty rate, based on six allegedly comparable licenses, as well as his understanding that VirnetX had a “policy” of licensing its patents for 1–2%. Apple argues that the licenses on which Weinstein relied were not sufficiently comparable to the license that would have resulted from the hypothetical negotiation. In particular, Apple points out that two of the licenses predated the patents-in-suit. Both of those agreements related to technology leading to the claimed invention, and one contained a software license in addition to a license for various patent applications. Apple further complains that three of the other licenses were entered into in 2012, a full three years after the date of the “hypothetical negotiation,” set in June 2009. Apple argues that at the time those licenses were entered into, VirnetX was in a much better financial position (and therefore a better bargaining position) than it was in 2009. Finally, Apple notes that the sixth license covered sixty-eight VirnetX patents,and was therefore much broader than the license to four patents Apple would be seeking in the hypothetical negotiation. It also equated to a 0.24% royalty rate, which is significantly lower than the 1–2% rate Weinstein testified VirnetX would accept.
(See my next post)
Very normal until the offer is actually made. One nice thing when this happens is other larger companies who may have been interested now get to see price action on a $46 offer when it comes, this can trigger other offers depending on what the BOD say after they get the $46 offer. I would not be too quick to sell yet. Keep an eye on the close. One thing for sure - the ex-CEO believes the company is worth $46 now and obviously more more in the future.
I agree, justice was not served here but it does highlight bigger issues in the system, lets hope our system of checks and balances works. If not this case will create real trouble for the future of software valuations. The intangible asset value accounted in good will, M&A or R&D will have to shrink - investor MUST have the expectation to monetize invention - if they choose that path.
On the obviousness and 101 test, we already know where Judge Chen stands based on his dissent but Prost, Lourie and Linn have unanimous language today making it very clear in this mornings "Arlington v Bridgeport Fittings" decision. This will be beneficial to VRNG if they get an en banc review. My emphasis is added these are direct quotes and will be used in petition towards the CAFC uniformity by VRNG....
"this court DOES NOT REVIEW supporting arguments, but only the decisions reached by the trial court. ... We generally do not consider arguments that the applicant FAILED TO PRESENT to the Board” and see no exceptional circumstances here requiring otherwise. See Baxter, 678 F.3d at 1362".
This is in direct conflict to Wallach and Mayer (not on Alice) but in his second argument on the 101. CAFC should NOT even consider argument that are not presented to the board or argued at trial. This is what Wallach did, he introduced his own argument and ruled unilaterally without evidence - Chen called them on it. So I think we have 4-2 right now if we get a review.
is not as much of a concern for CAFC in VHC but many people are drawing comparison to VRNG instead of the real issue which is the damages argument what Apple argued.