VirnetX Holding Corporation—a Nevada company that many would dub a “patent troll” as it has no meaningful source of income outside of patent litigation—has won a $502.6 million judgement against Apple in a legal case that has dragged on since 2012.
In October 2017, Apple was also ordered to pay over $439 million as its “VPN on Demand” feature and FaceTime were determined to violate VirnetX’s patents.
However, this verdict may not stand on appeal.
“The Patent Trial and Appeal Board has said the patents are invalid, in cases that are currently before the US Court of Appeals for the Federal Circuit in Washington,” Bloomberg reported.
As Ars has previously reported, VirnetX had won three separate jury trials against Apple, all in the Eastern District of Texas, a longtime hotspot for patent-holding companies seeking to sue tech companies. The first was in 2012, when a jury awarded $368 million in damages and the judge granted an ongoing royalty of one percent. Both holdings were overturned on appeal, however.
In February 2016, a second trial resulted in a $625 million verdict against Apple. That verdict was thrown out by the judge, who didn’t approve of VirnetX lawyers’ references to the 2012 trial. A third trial, in September 2016, resulted in a $302 million verdict, which is what the judge added to in his October 2017 judgment.
The case began way back in 2012 with four of VirnetX’s patents (1, 2, 3, 4), which had originated at a company called Science Applications International Corporation, or SAIC.
VirnetX’s business model does not appear to be financially successful for now. In its most recent annual report filing with the Securities and Exchange Commission, the Nevada firm reported a combined net loss of $75.1 million from 2015 through 2017, “with an accumulated deficit of $176 million.”