Apple Pays VirnetX $454m Settlement For Decade-Long Patent Battle

Apple seems to have conceded defeat in its long-running patent infringement battle against patent licensing firm VirnetX Holdings.

VirnetX issued a short statement last week that it has received a $454m payment from Apple for infringing its video-conferencing patents.

It comes after the US Supreme Court last month rejected an appeal made by Apple against the penalty awarded by a US court.

Patent settlement

“VirnetX, an Internet security software and technology company, announced today that it has received payment of $454,033,859.87, representing the previously announced judgment with interest in the VirnetX Inc. v. Apple case, 6:10-cv-00417,” VirnetX said.

The Supreme Court defeat came after the US Court of Appeals for the Federal Circuit denied Apple request to rule on the alleged use of two other VirnetX patents.

The case itself stretches back to 2010, when VirnetX sued Apple in the Eastern District Court of Texas for violating four of its patents with its FaceTime and ‘VPN on Demand’ applications on devices including the iPhone and iPad.

In 2012 a court ordered Apple to pay VirnetX $368 million in damages, but that ruling was eventually thrown out and was followed by a retrial in 2016.

In February 2016 a Texas jury found that Apple had infringed four of the company’s patents. VirnetX was awarded $302m in royalties.

That award is now higher at $439.8 million in damages, as well as fees, and interest.

The US Court of Appeals for the Federal Circuit in Washington upheld that decision in November 2019.

But Apple contested the court’s findings and appealed to the Supreme Court, calling the $440 million in damages ‘grossly excessive’.

Second case

But the US Supreme Court rejection of Apple’s appeal meant that the case was sent back to the district court in Texas for the $440 million damages to be enforced.

VirnetX demanded after the US Supreme Court ruling that Apple pay up within 20 days.

However, it should be noted that this Apple settlement may not end the battle between the two firms.

Apple’s settlement only covered Apple products from before the initial victory in 2012.

Apple and VirnetX are also currently fighting over whether redesigned versions of FaceTime and VPN on Demand (post 2012) still violate the same VirnetX patents. In this case, Apple has argued the VirnetX patent claims are invalid.

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