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November 07, 2012

Apple Ordered to Pay $368M to VirnetX for Patent Infringement

By Ed Silverstein, TMCnet Contributor

VirnetX has scored another major legal victory after a Texas court recently ordered Apple to pay the small software security business $368 million in damages.

The allegations relate to patent infringement involving FaceTime (News - Alert). In question were four patents related to virtual private networks.

VirnetX claimed that Apple used the same technology for FaceTime video calls, SlashGear reported.

Recently, VirnetX was awarded over $100 million from Microsoft for patent infringement. The company is expected to try to get damages from Cisco, Avaya (News - Alert) and Siemens, as well.

VirnetX wanted more than $700 million in damages from Apple.

“For years Apple refused to pay fair value for the VirnetX patents,” Doug Cawley, representing VirnetX, said in court, news reports said. “Apple (News - Alert) says they don’t infringe.”

“Apple developers testified that they didn’t pay any attention to anyone’s patents when developing their system,” VirnetX's lawyer also told Bloomberg (News - Alert) News.

“VirnetX is not entitled to money for things they did not invent,” Danny Williams, who represented Apple, argued in cour.”The VirnetX technology, if used, is a small part of very large, complex products.”

The award could in part lead to the U.S. International Trade Commission imposing a ban on Apple products impacted by the decision, The BBC said.

The Apple products at risk are recent iPhones, iPads, iPods and Macintosh computers.

"We believe in merits of our case against Apple," Kendall Larsen (News - Alert), VirnetX CEO and president, said in a statement made earlier this year."We will continue to defend against any unauthorized use of our intellectual property by all means available to us under the U.S. legal system, including in the ITC."

VirnetX Holding Corporation is an Internet security software and technology company. It holds 20 U.S. and 26 international patents and over 100 pending applications, according to the company’s website.

As a result of the verdict, VirnetX shares increased 23 percent to $32.33 in premarket trading, according to The Wall Street Journal.

Edited by Brooke Neuman
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