Decade-old Patent Battle Goes Apple's Way

On Thursday an appeals court upheld a ruling in favor of Apple, in a $503 million patent case with Nevada-based security software and technology vendor VirnetX that has been ongoing for thirteen years.

The US Court of Appeals for the Federal Circuit affirmed decisions from the Patent Trial and Appeal Board, which had deemed "unpatentable" two VPN patents VirnetX had accused Apple of infringing.

"We are disappointed and disagree with the Federal Circuit's decisions in light of its past rulings on these same patents," said VirnetX CEO Kendall Larsen in a canned statement. "We are evaluating all of our available options, including potentially seeking rehearing or certiorari review."

VirtnetX stock fell 14 percent after receiving a boost when the biz announced earlier in the day it would pay a special cash dividend of $1 per common share to shareholders.

"The dividend will be paid on or about April 17, 2023 to shareholders of record on April 10, 2023. The aggregate amount of the cash payment to be made in connection with this special dividend will be approximately $71.4 million," said VirnetX before the ruling was revealed.

At the time it expressed confidence the Apple litigation would soon close and committed to distributing a substantial portion of the proceeds to shareholders.

VirnetX later confirmed the offer stands, despite the outcome not going the way it had hoped.

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The litigation that just will not end began in 2010, when the Nevada-based outfit alleged Apple's iPhones, iPads and computers infringed upon VirnetX's VPN technology. Apple was ordered to pay $502 million in 2018.

The US Patent Trial and Appeal Board ruled in July 2020 that the technology in question was unpatentable, on the grounds that earlier publications had described the same VPN-related inventions.

"I'm pretty sure this dispute will never end between these two companies," Chief US Circuit Judge Kimberly Moore reportedly said during trial last September, when Apple asked to overturn the award of $502 million.

The pair have also been at loggerheads over Apple's alleged use of VirnetX's internet security technology – in features like FaceTime video calls. VirnetX won $440 million from that court case, which Apple has also challenged thoroughly in the courts. ®