VirnetX’s big US$625 million patent infringement win against Apple just became a big loss. Federal Appeals Court Judge Robert Schroeder tossed out the judgement and set a retrial saying VirnetX acted inappropriately during the trial and very likely prejudiced the jury.
Judge Schroeder hammered VirnetX for multiple references to a prior court win against Apple as proof the company willfully infringed on its patents. The Judge also said combining two cases in a single trial was overly confusing for the jurors.
The trial was a two-pronged event serving as a retrial for damages against Apple over a VPN-related patent, and as a new trial for patent infringement in iMessage and FaceTime.
Judge Schroeder called out VirnetX for repeatedly citing the earlier trial inappropriately saying, “Under the circumstances here, the repeated references to the prior jury verdict in the consolidated case resulted in an unfair trial.”
This patent infringement fight started in 2010 when VirnetX filed its case against Apple in the patent troll-friendly Federal Court in Eastern Texas. The jury awarded VirnetX $368.2 million in damages, and Apple appealed. Only days after winning the ruling, VirnetX filed a similar lawsuit covering newer Apple products.
That led to a combined verdict where a jury awarded VirnetX $334.9 for the first case and $290.7 million for the second. Apple appealed, and here we are with Judge Schroeder ordering separate retrials for each case.
Show me the money
VirnetX makes its money as a non-practicing entity, meaning it doesn’t make any products based on the patents it owns and instead licenses its portfolio to other companies. CEO Kendall Larsen commented on the new verdict saying, “We are disappointed by the Court’s decision to vacate its prior ruling on consolidation and ordering the parties to retry the cases as two separate matters.”
It’s no surprise Mr. Larsen is disappointed. VirnetX continues to rack up expensive legal fees and it isn’t making any of that back as long as judges keep ordering retrials. The salt in the wound for the company is that Judge Schroeder said referencing the earlier trial win was fine, but not in the way VirnetX’s legal team did.
The first of the two new retrials is scheduled to start on September 26th. The second trial will be scheduled after the first completes.
[Thanks to Ars Technica for court document]