Court Orders Apple To Pay VirnetX $502.6 Million


A federal Jury in Texas found Apple guilty of violating patents related to secure communications and ordered the iPhone maker to pay $502.6 million to VirnetX. The two companies have been battling court cases since 2010 when VirnetX first sued Apple claiming that iMessage features, VPN on demand, and FaceTime violated patents for secure communications. Apple however denied the claims dragging it into the eight-year court battle.

Following the victory, VirnetX saw its stock surge by 44% in the after-hours session on Tuesday. It had ended the day at $4.00. Apple’s shares on the other hand were slightly affected by the verdict as the company generates billions of dollars in revenue each year. Apple reported earnings of $20 billion in its latest quarterly results.

VirnetX announced revenue slightly over in 2017, though shareholders increased the stock by at least 70% with expectations of winning the court battle. The company is based in Zephyr Cove, Nevada.

The company trades in the New York Stock Exchange and offers products such as ‘the Gabriel Collaboration- a secure mail and messaging system.’ The U.S Securities and Exchange Commission (SEC) fillings reveal that the company’s revenue comes from verdicts in patent litigations.

VirnetX filed its case with Apple in the East Texas district where patent cases had a higher success rate compared to other courts. The Supreme Court, however, declared last year that patent holders would no longer file suits in just any court of their choice. The court battle has been going on for eight years, and involved several lawsuits and appeals which have been to the Federal circuit, patent office as well as the district court.  

Apple had earlier been ordered to pay VirtneX $439.7 million in October 2017 but Apple appealed the verdict. Microsoft and VirnetX have also had a similar legal battle over Skype technology where Microsoft paid VirnetX $200 million in 2010 and $23 Million in 2014 for updated technologies.

After the ruling was made, Kendall Larsen, VirnetX’s Chief Executive Officer said the compensation was ‘fair’ as it was based on the sale of over 400 million Apple devices. Laser added that the evidence was distinct.

He concluded saying that there was nothing to worry about once you told the truth. Apple lawyers did not make any comment on the verdict. VirnetX’s victory could however be short-lived as the Appeal Board and The Patent Trial said the patents are void, in ongoing cases which are before the U.S. Court of Appeals for the Federal Circuit.