In a Friday ruling by a federal judge in East Texas, a $650 million judgment against Apple Inc. (NASDAQ: AAPL) has been tossed and two new trials have been ordered. The loser in the decision is patent holder VirnetX Holdings Corp. (NYSEMKT: VHC).
VirnetX won a $368 million award in another case the company brought against Apple and won in late 2012 related to VirnetX’s claim that Apple infringed a VirnetX patent in the virtual private network functionality of iOS’s FaceTime app.
The decision announced by VirnetX Monday morning is based on what laymen (like us) would consider a technicality. The judge ruled that in the retrial for damages related to the earlier case, “repeated references to the prior jury verdict in the consolidated case resulted in an unfair trial.” The court ruled that the cases must be tried again and tried separately.
In a statement, VirnetX CEO Kendall Larsen said:
We are disappointed by the Court’s decision to vacate its prior ruling on consolidation and ordering the parties to retry the cases as two separate matters. We are reviewing all our options and will follow the Court’s direction as we start preparing for these retrials. We are confident that we have the resources required for these retrials. We trust that the jury will again make the right decision in the retrials.
According to the VirnetX press release, the company has two current patent infringement lawsuits pending against Apple in the Eastern District of Texas. The first case includes unresolved remanded issues related to (1) damages owed to VirnetX for infringement by Apple’s original VPN-on-Demand (VOD) and (2) the alleged infringement, damages and willfulness of Apple’s original FaceTime product. The second case covers issues of alleged infringement, damages and willfulness by Apple’s redesigned VOD in iOS 7 and 8, the redesigned FaceTime in iOS 7 and 8 and OS X 10.9 and 10.10 and iMessage.
VirnetX stock plunged to more than 40% to an intraday low of $2.14, in a 52-week range of $1.95 to $9.64. Shares traded as high as $40 in early 2013.