Genardo Kanushi
Feb 21, 2024

Supreme Court will not Hear Apple's $503M Patent Case Win

Patent Litigation


The U.S. Supreme Court recently chose not to review a substantial $502.8 million jury verdict in favor of VirnetX, a patent-licensing firm, in its long-standing legal battle against tech giant Apple over internet-security patents.

This decision effectively upholds a lower court's ruling that had previously overturned the jury's verdict, which was originally reached in Tyler, Texas. The legal case, which in fact stretches over 14 years, is centered around allegations that Apple's iPhones and iPads infringed onVirnetX's patents related to virtual private networks (VPNs).

VirnetX's appeal was rooted in its challenge against the U.S. Patent and Trademark Office's (USPTO) decisions to invalidate several of its patents. Despite the Patent Trial and Appeal Board's initial rejection of Apple's requests to invalidate these patents citing tardiness, the patents were later declared invalid following separate requests from Mangrove Partners, a hedge fund, in which Apple was permitted to join.

The core of the dispute involved the inter partes review (IPR) process, a mechanism that allows for the re-examination of the validity of patents, which has been frequently utilized by large tech corporations to challenge patents they are accused of infringing. VirnetX criticized this process, arguing that it encourages the harassment of patent owners by enabling entities with no direct interest in the patents to initiate challenges, thereby creating an unreasonable burden on patent holders.

The U.S. Court of Appeals supported the invalidation of VirnetX's patents, leading to the overturning of the $502.8 million verdict against Apple. VirnetX contended that the Supreme Court's refusal to hear its appeal could further incentivize such challenges against patent owners, highlighting a case where sanctions were imposed on an entity for misconduct related to patent disputes.

This saga is part of a broader narrative of VirnetX's legal victories and defeats against Apple, including a previous win where VirnetX was awarded $440 million over the tech giant's use of its security technology in features like FaceTime. The ongoing legal battles underscore the complex interplay
between patent law, technological innovation, and the strategies employed by both patent holders and large tech companies within the U.S. legal system.