Categories Earnings, Technology

Apple to pay $502.6 million for patent infringement

Apple Inc (AAPL) was ordered to pay $502.6 million to VirnetX Holding Corp for infringement of secure communications patents. The ruling by a Texas federal jury is the latest twist in an 8-year old legal tussle that started when VirnetX accused Apple of infringing four of its patents for several of the latter’s products including iPhone, iPad, iPod touch and Mac. VirnetX alleged that Apple’s VPN, FaceTime and iMessage features infringed its patents.

This dispute can be compared to a rollercoaster ride. In 2012, Apple was asked to pay $368 million in damages over one patent, a ruling which was rejected around two years later stating that the jury was misled on certain facts. This lawsuit was then combined with the first one and sent for retrial in 2016, which led to Apple getting fined for $625 million. This decision too was reversed on account of jury confusion and mistrial.

Two retrials were conducted, which led to a $302.4 million penalty for Apple which was increased to $439.7 million last year, a decision Apple appealed against. The recent win for VirnetX might not last long either as its patents were declared invalid back in 2016. A final decision is pending on this issue.

During the course of the trials, VirnetX has targeted other Apple products over patent infringements. Once again it appears the ride will go on around verdicts and appeals. VirnetX’s stock climbed more than 40% in after-hours trading on Tuesday. VirnetX’s management and investors seem hopeful of winning against Apple in the long run.

Apple’s stock, however, moved little as the penalty amount appears insignificant compared to the tech giant’s quarterly profits.

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