Apple loses its patent battle against VirnetX, faces over $300 million in damages

By Lulu Chang Published October 1, 2016

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Apple’s arch nemesis for the time being is not Samsung or another smartphone maker — it’s VirnetX, a company most of us probably haven’t even heard of. It’s a firm founded by ex-employees of government contractor SAIC Inc., and is responsible for producing the technology that allows for secure communications. And according to VirnetX, that technology is being used by Apple in applications like FaceTime without proper permissions. Now a federal jury in Texas has ordered Apple to pay over $302 million worth of damages.

It’s the latest in a patent saga that first began in 2010. VirnetX first filed a lawsuit in the Eastern District of Texas federal court, and said that four of its patents for secure networks had been infringed upon. Two years later, a jury ruled in the Nevada-based company’s favor, awarding it $368.2 million. But then, an appeals court partially overturned that decision, citing problems with how the original judge told jurors to calculate damages owed.

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Soon thereafter, VirnetX combined two lawsuits, and in February another jury awarded the company an impressive sum of $625.6 million — one of the largest payouts ever ordered in an American patent case. This result was also ruled null and void, which leads us to present day. And on Friday, it looks like VirnetX was given the last laugh, to the tune of $302.4 million.

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Apple spokeswoman Rachel Tulley did not comment on the latest proceedings, and it looks like the news could get even worse for the Cupertino company. Further court proceedings are yet to take place, which will determine whether or not Apple “willfully infringed the patents.” If a judge rules that the company did do so, the damages could be even greater. Worse still, Apple is involved in another lawsuit with VirnetX; this one not over FaceTime, but over iMessage and some other Apple security features.

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