Will Apple Pay the $943 Million It Now Owes VirnetX?
A small Nevada company has won an award of $506 million related to claimed patent infringement by Apple, which now owes VirnetX nearly $1 billion. But will Apple ever have to pay?
Late Tuesday, a federal court jury in the eastern district of Texas awarded VirnetX Holding Corp. (NYSEAMERICAN: VHC) $502.6 million in a case that VirnetX brought against Apple Inc. (NASDAQ: AAPL) regarding infringement of VirnetX patents and patented technology.
VirnetX and Apple have been in court since 2010 over these and other VirnetX claims of patent infringement by Apple. In 2016, the same court tossed out a $650 million judgment against Apple and ordered a new trial. Tuesday’s verdict is the result of that new trial.
At issue in the case were four patents related to secure communications in three Apple features: FaceTime, VPN on Demand and iMessage. Apple had denied the claims and has declined to comment on the jury’s recent verdict, but an appeal is highly likely.
Apple also was ordered to pay VirnetX roughly $440 million in a trial concluded last October. Apple has said it will appeal the verdict. Combined with Tuesday’s judgment, the Cupertino giant now owes VirnetX about $943 million.
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VirnetX’s victory may be short-lived, however. According to Bloomberg, the Patent Trial and Appeal Board has declared that the four VirnetX patents were invalid in cases currently being considered by the U.S. Court of Appeals in Washington, D.C., the venue for all patent appeals. The appeals court declined to put the district court trial on hold saying that a verdict in that case likely would occur before a final decision on the validity of VirnetX’s patents.
VirnetX stock jumped 21% to $4.85 after the late Tuesday announcement, but shares drifted lower Wednesday afternoon and they traded down about 5.4% early Thursday morning at $4.35. The 12-month consensus price target on the stock is $2.88.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
