VirnetX Holding’s decade-long patent infringement battle against Apple appears to be closer to a finality, but the case must go back to the Eastern District of Texas at least one more time.
This next round is solely about redetermining how much Apple will have to pay in damages.
The U.S. Court of Appeals for the Federal Circuit ruled Friday that Apple violated two VirnetX patents on secured communications technology, but that the iPhone maker did not violate two other patents.
In a unanimous opinion, a three-judge panel of the Federal Circuit tossed out a half-billion-dollar jury verdict from 2018 and sent the long-running litigation back to East Texas for the amount to be recalculated.
Nevada-based VirnetX, which is represented in Texas by Caldwell Cassady & Curry, filed its lawsuit in 2010 claiming that Apple’s mobile devices featuring Facetime and Virtual Private Network on Demand employs VirnetX’s patented technology without a licensing agreement.
Apple fired back, arguing that VirnetX’s patents were invalid.
After a week-long trial in November 2012, the jury awarded VirnetX $368.1 million in damages.
The same day as the verdict, VirnetX filed a second infringement lawsuit against Apple claiming that its redesigned versions of Facetime and VPN on Demand also violated their patents.
In April 2018, a jury in Tyler found that Apple had indeed violated four of VirnetX’s patents and awarded $502.6 million as a reasonable royalty for use of VirnetX’s inventions.
In oral arguments in October, Apple told the Federal Circuit panel that the claim in the $502.6 million dispute is “indistinguishable” from the first lawsuit and trial.
The appeals court on Friday tossed out the findings that Apple’s Facetime violated VirnetX’s program, but allowed the verdict involving VPN on Demand to stand.
“We affirm the judgment of infringement as to two of the patents but reverse on two others,” Judge Richard Taranto of the Federal Circuit wrote in his 31-page opinion. “In light of our partial reversal on infringement, we vacate the damages award and remand for the district court to consider whether it can and should enter a revised award without conducting a new trial and, if not, to hold a new trial limited to damages.”
The Federal Circuit noted that the jury “did not indicate which portions of the award were allocated to which patents.”
“Those rulings raise the question of whether a new trial must or should be held because of the reduced basis of liability,” the appeals court said. “We see no difficulty with limiting any such trial to damages, but there is a question whether a limited trial need or should be held at all. We will not decide that question.”
Instead, the three-judge panel sent the case back to U.S. District Judge Robert Schroeder III to decide the issue.
Meanwhile, the initial 2010 lawsuit also remains unresolved. The federal trial judge tossed out the $368.1 million verdict and conducted a new trial, which resulted in another verdict against Apple and a $439.8 million judgment for VirnetX.
In January 2019, a three-judge panel of the Federal Circuit rejected Apple’s arguments and upheld the verdict. Apple asked the full Federal Circuit to reconsider, but the appeals court denied the request.