US court tells Apple to pay $503 million over patent violation

2020-11-02

A jury in Texas ruled on Friday that Apple must pay $502.8 million in royalties to Nevada-based software firm VirnetX, over infringement of its patented VPN technology.

The two firms have been fighting the case for the last ten years, with VirnetX claiming that Apple's VPN-on-Demand and FaceTime services use VirnetX's technology, which it developed for the CIA.

, the jury was asked to decide only how much the iPhone maker owes VirnetX in royalties for VPN-on-Demand - a service that enables iOS users to access VPNs.

VirnetX told the court that it was entitled to receive over $700 million from the iPhone maker. However, Apple argued that it owed VirnetX a much smaller amount ($113 million) and that the royalty rate should not be more than 19 cents per unit. The jury finally settled the rate at 84 cents per unit.

In a statement, Apple said that it was not happy with the ruling and plans to appeal the decision.

"Cases like this only serve to stifle innovation and harm consumers," the company stated.

While VirnetX is based in Nevada, it has a history of filing patent suits in states where judges are more inclined to give rulings against tech firms.

This particular legal squabble dates back to 2010, when VirnetX accused the iPhone maker of infringing on four patents. Those patents covered security communication technology, such as secure communications links and virtual private networks.

In 2016, a jury at the East Texas Federal District Court ruled that Apple had infringed on four of VirnetX's patents. The court to pay $626 million, but the US Court of Appeals for the Federal Circuit eventually overturned the ruling, ordering two retrials.

In October 2016, a federal judge in Tyler, Texas, for infringing VirnetX's patents in the FaceTime and iMessage apps. The damages awarded also included an amount that Apple was asked to pay for the use of VirnetX technology in VPN-on-Demand. The amount was increased to $439.7 million, including interest and other costs, in the second retrial.

Since then, Apple has appealed the decision many times, but courts have continually ruled in favour of VirnetX.

In March, VirnetX said that it had finally received a payment of more than $454 million from Apple because of a ruling over earlier versions of the iOS features.

That case came to an end after the US Supreme Court rejected another appeal from Apple to rehear the case.