Court Cancels Verdict Requiring Apple to Pay $625.6M to VirnetX in Patent Case


A federal judge cancelled a jury verdict requiring Apple Inc. (NASDAQ: AAPL) to pay $625.6 million VirnetX Holding Corporation (NYSEMKT: VHC) in a patent lawsuit.

In February, a jury in the U.S. Court for the Easter District of Texas, Tyler Division found that Apple’s VPN On-Demand (VOD), iMessage, and FaceTime services violated the four patents of VirnetX in February.

Apple iPhone

The stock price of VirnetX plummeted more than 43% to $2.43 per share while Apple’s shares gained 1.77% to $106.05 each today.

Court orders separate retrial of two patent cases against Apple

On Friday, District Judge Robert Schroeder in Tyler, Texas issued a new ruling that overturns the previous order citing the reason that it is unfair for Apple to combine the two patent lawsuits filed by VirnetX into a single trial. The judge ordered a separate retrial for both cases.

In his ruling Judge Schroeder said the jurors were possibly confused by more than 50 references to the previous case even if it had “incredibly similar issues.  The judge added that the jurors probably deferred improperly to the earlier findings that Apple willfully infringed VirnetX patents. .

“The repeated references to the prior jury verdict in the consolidated case resulted in an unfair trial,” wrote Schroeder in his ruling. Apple is scheduled for a jury selection on September 26.

VirnetX’s first case against Apple include unresolved remanded issues related to the damages owed related to the VOD patent infringement and the alleged infringement and damages involving its FaceTime product.

The second case involves Apple’s infringement and damages involving its redesigned VOD in iOS 7 and 8 and the redesigned FaceTime iOS 7 and 8, OS X 10.9 and 10.10, and iMessage.

VirnetX is reviewing all options

In a statement, VirnetX CEO and President, Kendall Larsen, said, “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.”

“We are reviewing all our options and will follow the Court’s direction as we start preparing for these retrials. We are confident that we have the resources required for these retrials. We trust that the jury will again make the right decision in the retrials,” he added.

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