There is a familiar fate that the over decade-long Apple vs VirnetX patent battle has met today. In a history revision of sorts, the appeal made by Apple against a November 2019 decision of a three-judge bench on its VirnetX patent lawsuit has been rejected by a full court. The court has further barred Apple from making the argument that VirnetX’s patents are shady, since similar claims have failed previously.
The news resulted in an instantaneous upswing for the little known VirnetX. Company’s shares rose by 10% to $4.66 at 2:38 p.m. in New York trading, after jumping as much as 18% earlier Monday. This is largely also due to its strong footing in the case and having a giant such as Apple in a chokehold. Also, it doesn’t hurt that it might just be getting around half a billion dollars in fines if everything goes to plan.
In November 2019, a three-judge bench of the same court had proclaimed that there was substantial evidence of Apple using VirnetX patented technology in its apps and thus owes the company reparations. The court found Apple infringing two patents held by VirnetX in a previous version of the app, which has since been updated and doesn’t violate said patents anymore.
However, as is usually the case with such patent battles, this isn’t a straight forward case either. That is because the patents in question are themselves under direct scrutiny. A patent officer has found just 1 out of 4 aspects of said patents to be valid. Therefore, Apple’s skepticism of the patents is justified. But VirnetX says that the decision is not final yet and Apple is just trying to evade inevitable compensations.
Just to give you a bit of a refresher on the case, Apple has been in a long drawn battle with VirnetX over patent laws. VirnetX, which holds multiple VPN patents, has long accused the Cupertino giant of using its patented virtual private network(VPN) technology in Facetime. According to VirnetX, this is an infringement over the patent laws established by the U.S. judiciary system, as the company is owed royalties, after having mutually agreed on the terms, which Apple did not do.
Apple, of course thinks otherwise. Apple challenges those accusations by saying that the patents should have been awarded to the company in the first place. It further claims that the awards are excessive, especially since the company reports just around $2 million in annual revenue. The case is VirnetX Inc. v Apple Inc., 19-1050, U.S. Court of Appeals for the Federal Circuit (Washington).
This isn’t the only legal battle that Apple has fought(and lost) over patent breaches. The company has also been fined a gargantuan $439 million over earlier versions of VPN on Demand and FaceTime, a decision that Apple is asking a reconsideration for, especially on the fines.