Apple wins US patent appeal in $502 million judgment against VirnetX

March 30 (Reuters) – Apple (AAPL.O) persuaded a US appeals court on Thursday to uphold a patent court ruling that could jeopardize a $502 million ruling for patent licensing firm VirnetX Inc in the companies’ long-running battle over privacy-software technology.

United States Court of Appeals for the Federal Circuit Certain A decision by the US Patent and Trademark Office invalidates patents that VirnetX has accused Apple of infringing.

VirnetX CEO Kendall Larsen said in a statement that the company is disappointed with the decision and is considering seeking a rehearing or an appeal to the US Supreme Court.

VirnetX stock had fallen more than 14% by Thursday noon after the ruling. It had risen 55% the morning before the decision was published, after the company announced it would pay a special dividend to shareholders and predicted possible future payouts from Apple’s lawsuit.

An Apple representative did not immediately respond to a request for comment.

The two companies fought a 13-year legal battle that included multiple trials and appeals. An East Texas arbitration panel awarded VirnetX $502 million in 2020 after determining that Apple infringed the virtual private network (VPN) patents in question in Thursday’s decision.

Apple has appealed the ruling separately, but the Federal Circuit has not yet issued a ruling in this case. The court heard common arguments in both cases in September, and both sides said upholding the patent nullification decision would also likely negate the jury’s decision.

“If the court upholds (USA’s office)’s decision, we’re in big trouble,” Jeff Lamkin, a VirnetX attorney from Mulamkin, said in the September hearing. “I don’t think we have an enforceable ruling.”

On Thursday, the Federal Circuit affirmed decisions of the USPTO’s Patent Trial and Appeals Board that the patents are invalid in light of previous publications describing the same inventions.

VirnetX separately won a $302 million judgment against Apple in an East Texas court in 2016, which was later increased to $440 million, over related allegations that the tech giant used its internet security technology on features like FaceTime video calls.

(Covering) By Blake Brittain in Washington Editing by David Barrio, David Gregorio and Jonathan Otis

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