A court has overturned a possible legal bill of $368m for Apple in an appeal case against patent company VirnetX, for the use of four patents related to virtual private network (VPN) technology used in its FaceTime calling system.
The case dates back to November 2012 when Apple was ordered by a jury to pay VirnetX $368m. Apple said at the time it would appeal and the US Court of Appeals for the Federal Circuit in Washington has now ruled on the case, throwing out the award.
In the ruling chief judge Sharon Prost wrote that, while the patents were valid, the judge overseeing the initial case had erred in his instructions to the jury on the value of the patents being used.
Specifically she said that there was no evidence that the use of VirnetX’s patents had been key to sales of Apple products, undermining the value of the patents.
“The law requires patentees to apportion the royalty down to a reasonable estimate of the value of its claimed technology, or else establish that its patented technology drove demand for the entire product. VirnetX did neither,” she wrote.
Chief executive of VirnetX Kendall Larsen said the company was disappointed with the decision, but drew some solace from the fact its patents were upheld.
“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,” he said. “We look forward to readdressing the FaceTime infringement and damages issues as soon as possible.”
V3 contacted Apple for comment on the decision but had received no reply at the time of publication.
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