After beating Microsoft, VirnetX hits Apple with patent suit

Settled with Microsoft for $200M last May, now moves against Apple's iPhone

A firm that received a US$200 million settlement from MIcrosoft in May filed similar patent infringement charges against Apple Wednesday, claiming that the iPhone and iPad illegally use its technology.

Scotts Valley, Calif.-based VirnetX sued Apple and three other companies -- Cisco, NEC and phone maker Aastra -- in the same East Texas federal court where it was awarded a $106 million judgment in March in its case against Microsoft.

Two months later, Microsoft settled for almost twice that amount to dismiss the original three-year-old lawsuit and a newer follow-up that added Windows 7 to the list of infringing products. Microsoft also licensed the VirnetX patents as part of the settlement.

Wednesday's suit claimed that Apple's iPhone -- all models, including the newest iPhone 4 -- iPod Touch and iPad infringed a pair of VirnetX patents.

One of the two that Apple allegedly infringed -- identified as Patent No. 6,502,135 -- was also one of the pair that VirnetX said Microsoft violated.

The patent cited in both lawsuits, titled "Agile network protocol for secure communications with assured system availability," describes technologies for creating and managing a virtual private networking (VPN) connection.

VirnetX is a holding company that claims a portfolio of four dozen patents, many of them awarded to a team of engineers who once worked at SAIC, or Science Application International Corp., a firm that regularly contracts with the Department of Defense.

"We expect to derive the majority of our revenue from license fees and royalties associated with these patents," VirnetX plainly states on its Web site.

It hasn't done badly. On Monday, the company announced second-quarter revenues of $200 million, up nearly 28,000-fold from the $7,200 it earned in the same quarter in 2009.

The lawsuit also named Canadian company Aastra, U.S.-based Cisco, and the Japanese multinational firm NEC, with the other defendants charged with infringing one, four and two VirnetX patents, respectively.

VirnetX drew the same judge who heard the Microsoft case, U.S. District Court Judge Leonard Davis, for its latest lawsuit.

VirnetX has asked for both unspecified damages and injunctive relief, although the latter is rarely awarded in patent litigation.

But it's not impossible. Last October, Davis did issue an injunction in another patent lawsuit when he barred Microsoft from selling its Word program. The injunction went into effect in January 2010, forcing Microsoft to strip the infringing technology from Word 2007 .

VirnetX is again represented by McKool Smith, the Dallas law firm that represented it in the Microsoft patent infringement case.

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Gregg Keizer

Computerworld (US)
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