US court throws out $368.2 million patent award against Apple

A lower court made mistakes in defining the value of the patented technology asserted by VirnetX, an appeals court says

A U.S. appeals court has thrown out a US$368.2 million award against Apple in a patent infringement case brought by patent-holding and software company VirnetX.

The U.S. Court of Appeals for the Federal Circuit on Tuesday declined to invalidate VirnetX's four Internet security-related patents, but ruled that Apple's VPN On Demand service did not infringe one of the Nevada firm's patents. The U.S. District Court for the Eastern District of Texas also erred in defining the value of the patented technology related to secure communications links in two patents, and should reexamine whether Apple's FaceTime application infringes the two patents under a correct claim construction, the appeals court ruled.

The district court must also reconsider the jury's damages award based on the appeals court ruling, the higher court said.

"In calculating the royalty base, [the district court] did not even try to link demand for the accused device to the patented feature, and failed to apportion value between the patented features and the vast number of non-patented features contained in the accused products," Chief Judge Sharon Prost wrote for the appeals court.

VirnetX acquired the four VPN-related patents from SAIC in 2006. Two of the patents involve DNS and resolving domain names using secure communications links. The other two patents involve using DNS proxies to intercept Web traffic to determine whether a DNS request is for a secure site.

VirnetX, in a patent lawsuit filed in late 2012, accused Apple's iPhone 5, iPod Touch 5th Generation, iPad 4th Generation, iPad mini and Mac computers running the Mountain Lion operating system of infringing the four patents.

VirnetX said it was disappointed with the appeals court's decision. "We are bolstered by the fact that the patents were again found valid and that it was confirmed that Apple's VPN on Demand functionality infringes the VirnetX patents," Kendall Larsen, VirnetX CEO and president, said in a statement. "We look forward to readdressing the FaceTime infringement and damages issues as soon as possible."

Apple representatives didn't immediately respond to a request for comments on the appeals court decision.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags intellectual propertysecurityU.S. District Court for the Eastern District of TexaspatentlegalKendall LarsenVirnetXSharon ProstU.S. Court of Appeals for the Federal CircuitApple

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Grant Gross

IDG News Service
Show Comments

Cool Tech

Crucial Ballistix Elite 32GB Kit (4 x 8GB) DDR4-3000 UDIMM

Learn more >

Gadgets & Things

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Family Friendly

Lexar® JumpDrive® S57 USB 3.0 flash drive 

Learn more >

Stocking Stuffer

Plox Star Wars Death Star Levitating Bluetooth Speaker

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?