Apple Loses Appeal in VirnetX Patent Dispute, Set To Pay $503 Million

Apple Loses Appeal in VirnetX Patent Dispute, Set To Pay $503 Million

A jury in Texas has denied Apple Inc’s appeal to reduce the $502.8 million award to VirnetX Holding Corp in a 10-year long patent infringement dispute.

News reports suggest the latest verdict by U.S. District Judge Robert Schroeder in Tyler, Texas will see Apple pay Nevada-based Internet security software company a hefty sum of $1.1 billion or more including payments, royalties and interests. (source)

Apple has also made several statements against VirnetX, including that VirnetX’s compensation should be limited to $113.7 million and below. Apple also flagged to the jurors that the U.S. Patent and Trademark Office had determined VirnetX’s claims ‘unpatentable’. However, Apple failed to inform the jurors in time to salvage damages. (source)

The two technology giants have been embroiled in a decade long patent infringement dispute involving technology used in VPN On Demand and Apple’s FaceTime. VirnetX claims the technology in question was acquired for the U.S. Central Intelligence Agency and that both VPN On Demand and FaceTime used its inventions.

In October 2020, authorities determined that Apple infringed two VirnetX patents connecting to virtual private networks, otherwise known as VPN, to which users of iPhones and iPads can and may connect. In a previous lawsuit, jurors have also determined that Apple’s iMessage features had infringed on VirnetX patents in relation to communications security.

Apple defends their reason for the appeal in a statement released by the company:

‘This case has been going on for over a decade, with patents that are unrelated to the core operations of our products and have been found to be invalid by the patent office. Cases like this only serve to stifle innovation and harm consumers.’


VirnetX informed the jury that the company seeked more than $700 million in compensation, but Apple insisted that only $113 million was owed to VirnetX in royalties for VPN On Demand. Apple claims the royalty rate should not exceed 19 cents per minute. The jury agreed on 84 cents per unit.

VirnetX has yet to respond to a request for comment.

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