Apple (AAPL) Hit With $368M in Damages in VirnetX Patent Suit

By Nov 7, 2012, 7:20 AM Author's Blog  

A Texas federal court on Tuesday ordered Apple (AAPL) to pay patent holding and security software firm VirnetX Corporation (VHC) $368 million in damages in a patent lawsuit.

VirnetX sued Apple for violating its collection of network patents that have a virtual private network technology focus, and that Apple has been apparently incorporating into products like FaceTime. Use of the technology on Apple’s iPhone, iPad and Mac products were also called into question.

Apple contended that VirnetX’s patents were invalid, and denied any infringement. However, U.S. District Judge Leonard Davis’s court ruled in favor of VirnetX. Originally the Zephyr Cove, Nevada-based company, which won a $200 million settlement from Microsoft (MSFT) in a separate lawsuit in 2010, was asking for $708 million, but apparently the jury decided $368 million was enough.

[via Bloomberg]“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.”

VirnetX’s suit against Apple was first filed in November 2011. The company claimed Apple’s iPhone 4S infringed on its ”Method for Establishing Secure Communication Link Between Computers of Virtual Private Network” patent.

Of course, this case is far from over. Apple will obviously appeal the ruling. And even if it doesn’t win, it should be able to get the court to reduce the $368 million fine.

Following the verdict, VirnetX said it would seek a further order to block any future use of its patented technology.

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