Home IT companies Court orders Apple to pay $368.2 million to VirnetX

Court orders Apple to pay $368.2 million to VirnetX

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A court in Texas ordered Apple to pay VirnetX$368 million for patent infringement related to VPN (virtual private network) technology.
VirnetX has 45 patents that relate to the transmission and encryption of real-time data. According to the plaintiff, the Facetime app uses a DNS service similar to the one described in the patent. It looks like they succeeded to convince the court that they’re right, and now Apple will have to make a hard choice – to refuse the video chat or agree on royalties.
In addition VirnetX demanded to prohibit the import of iPhone, iPad and Mac devices. If Apple does not agree on the amount of royalties by the middle of next year, this demand may be satisfied.
Representatives of the defendant believe that Apple does not owe VirnetX anything. And they also stated that if any technology is involved, it is very limited.
In addition to Apple, VirnetX lawyers have targeted Cisco Systems, Avaya and Siemens Enterprise Communications. These companies are accused of similar violations. The amount of claims against them is estimated at $700 million, and hearings on these cases will be held early next year.
It’s not the first time for VirnetX to win a case like this. Just a reminder that in 2010 Microsoft was also ordered to pay $106 million for VPN patent infringement.
VirnetX was founded by former employees of SAIC Inc. which created VPN technologies for the U.S. CIA using U.S. taxpayers’ money. It inherited the patents from that company.
Apple lawyers do not agree with the verdict and are preparing to appeal. However, because of the negative news, shares of the American IT giant have fallen in price. According to the exchange experts, since September 19 this year, the market capitalization of Apple has decreased by almost 20% and fell to a six-month low. Shares of VirnetX , for obvious reasons, have been rising in value lately and have risen from $7.71 to $34 over the past couple of years. And the news of the successful litigation has led to a rise of almost 28%.
It is no secret that the system of intellectual property protection, as it exists now, protects the rights of "patent trolls" rather than companies involved in real production. For example, in 2011, the U.S. Congress, along with the Patent Office, prepared a report on lawsuits in this area, which states that in 2010, about 40% of the cases were brought by organizations not engaged in anything other than litigation. Whereas five years ago they accounted for no more than 22%.
Such a trend is alarming and indicates that the patent law urgently needs to be reformed, and most radically, otherwise the consequences can be very negative.
UPD. list of infringed patents : 6, 502, 135 , 7, 418, 504 , 7, 921, 211 and 7, 490, 151

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