Detailed Analysis of Virnetx vs Apple
Virnetx wins $626 million in damages against Apple
The case between Virnetx and Apple has come to a close in a classic Texas showdown, precisely East Texas. Specifically, the case involved 4 patents that VirnetX sued Apple for infringement. A description and link to each patent is located below. Keep in mind, they are very technical.
- Patent US 7921211 – Agile network protocol for secure communications using secure domain names
- Patent US 7418504 – Agile network protocol for secure communications using secure domain names
- Patent US 7490151 – Establishment of a secure communication link based on a domain name service (DNS) request
- Patent US 6502135 – Agile network protocol for secure communications with assured system availability
Where did the company get these patents?
Earlier, VirnetX bought these patents from Science Applications International Corporation. Likely, they paid a significantly smaller amount for the patents than what it won in the Apple lawsuit.
What is the value breakdown of the $626 million?
VPN on Demand feature: ~ 335 million
Facetime, iMessage infrigements ~ 291 million
What's next?
Perhaps Apple will try appeal this verdict or reduce the damages. Although it can afford to pay this without rattling investors or its long-term strategy, it would prefer not to pay anything.
VirnetX will likely continue attacking other clients. It previously attacked Microsoft for a Skype application patent. Foreseeably, Google Voice and other messaging/communication companies might want to be careful against VirnetX exercising patents in this space.
Patent-troll?
This is the crux of this debate: VirnetX does not apply these patents, but rather sues companies that utilize applications that infringe on VirnetX's technology. In some essence, it acts as a patent-troll because it attacks major corporations and tries to take some of their margins. While these companies do appeal and fight back, a patent has power. That power turns into value, which VirnetX extracts.
This leads to the the flip-side, whether these companies are truly making valuable. One can argue that the inventors and people who find value in these ideas (whether they buy or create them) clearly have a visionary goal. However, it is hard to classify VirnetX in this category, because it purposefully buys these patents for the goal of suing companies.
Source: Plaintiff Settlement from the US Court.
I enjoyed your analysis on whether or not VirnetX is a patent troll, free of any moral judgements. I agree that the best way to approach this topic is with a very unbiased, objective mindset. One point that may be relevant to this question is that VirnetX actually also licenses some of the patents they purchase.
ReplyDeleteHi Jaskirat,
ReplyDeleteGreat post! I really enjoyed reading it. I enjoyed seeing the part about how VirnetX got these patents. You mentioned that VirnetX got the patents from SAIC. However, from my knowledge, it was only the Patent 6502135 in which VirnetX acquired the patent from SAIC. To make this post even better, I recommend talking about the specific claims that were violated.
Once again great post!
Great post, I liked how you played out what you were talking about in a clear and concise way. I completely agree that this case must be examined in an unbiased fashion.
ReplyDelete