While there are a million companies out there that device creative and equally ingenious ways of making money — hidden among them is a few who never actually make any products from this ideas — but the make money anyway. Call Apple a patent troll, but the Cupertino based tech giant has suffered in the hands of far more sophisticated patent trolling warlords than it cares to admit and there seems to be not an end in sight. An East Texas jury has just ruled that Apple must pay $625.6 million to a patent holding firm — VirnetX— for infringing on a number of its intellectual properties. For clarity purposes ; VirnetX doesn’t produce any products or offer any services from its numerous intellectual properties, but reportedly only makes money through suing for infringement of its patent. The company had sued Apple inc. for infringement of its communications protocol patents in its FaceTime, VPN on Demand, and iMessage services, as well as in the devices that used them. For a company with only 14 employees and which leases a small office suite in Zephyr Cove, Nevada, for $5,000 a month, according to its most recent yearly financial statement, this win is a jackpot for virnetX. This isn’t the first time VirnetX has sued Apple, the “phantom company” had earlier sued Cupertino’s Apple for infringement of these specific intellectual properties, winning a judgement which required Apple to pay $368 million to the firm and almost scoring a “running royalty” of one percent of iPhone and iPad sales. Later in September 2014, a federal appeal court threw out the $368 million damages earlier awarded for patent infringement against VirnetX Holding Corp. on grounds that the previous East Texas Court’s decision was “tainted”. For this last victory, VirnetX sued Apple for $532 million, but later raised the figures during legal proceedings as Apple continued to use the protocols in question despite being under legal scrutiny.
Both cases were tried in the East Texas Federal District Court, a region which is allegedly notoriously friendly to patent owners. VirnetX has used courts in the district on several occasions to go after other big tech firms in the past, suing them for infringement of its wide range of patents it apparently has no intentions of using. VirnetX has had some big wins in the past too. The company launched a legal battle against Microsoft for infringing its patent. The case ended in a $200 million settlement by Microsoft. Microsoft also later paid $23 million to end claims that Skype also infringed VirnetX patents. VirnetX sued Cisco also but Cisco took the case to a jury trial and luckily prevailed.
The patents which VirnetX accused Apple of infringement include ;
1. Agile network protocol for secure communications with assured system availability with United States Patent Number — 6,502,135 — filed on February 15, 2000.
2. Establishment of a secure communication link based on a domain name service (DNS) request with United States Patent Number —7,490,151— filed on September 30, 2002.
3. Agile network protocol for secure communications using secure domain names with United States Patent Number — 7,418,504 filed on November 18, 2003.
4. Agile network protocol for secure communications using secure domain names (2) with United States Patent Number — 7,921,211 filed on August 17, 2007.
It is also highly likely that Going forward, VirnetX may seek to impose a “running royalty” on Apple products that infringed its intellectual property like it unsuccessfully did the last time. Nonetheless, Apple is surely looking to appeal the judgement, hoping to ones again successfully overturn the East Texas court Jury decision.