Saturday, February 13, 2016

In-depth Analysis of VirnetX and Apple Case


VirnetX, an Internet security software and technology company, was recently awarded $625.6 million in a verdict against Apple for infringing on four patents. A US Court in Texas came down with the ruling stating that Apple willfully infringed on VirnetX patents in their VPN On-Demand, Imessage, and Facetime features. This case also has legacy elements from a marathon case in 2012, in which VirnetX claims that Apple infringed on patents with its Siri technology. Apple is one of the most sued company’s when it comes to Non-practicing entities (NPE). Basically, a non-practicing entity is any company or firm who holds the patent on a technology that they don’t even make. VirnetX only has 14 employees and only makes one product, yet they have an extensive patent portfolio that includes 80 patents, making them a patent troll. VirnetX purchased the four patents in the Apple lawsuit from the Science Applications International Corporation. VirnetX has had past success in patent trolling, winning a 200 million dollar payout from technology giant Microsoft.


A big point made in the Apple vs. VirnetX lawsuit was that the patent infringement was willful. Apple knew that they were infringing on VirnetX patents, but made no effort to pay royalties or seek acceptable licensing. After the verdict, Apple filed court papers asking US District Judge Robert Schroeder for mistrial, claiming that VirnetX’s legal counsel misled and confused the jury during closing arguments. This $625.6 million may seem small in the grand scheme of things, considering that Apple’s cash pile reached $216 billion in January. However, Apple is adamant about setting a precedent for patent trolls. Many large tech companies are screaming for patent reform, so that patent trolls like VirnetX can’t make money off suspect lawsuits.  

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