U.S. Supreme Court rejects Apple appeal in patent fight with VirnetX

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© Reuters. FILE PHOTO: The Apple logo is shown atop an Apple store at a shopping mall in La Jolla, California© Reuters. FILE PHOTO: The Apple logo is shown atop an Apple store at a shopping mall in La Jolla, California

By Andrew Chung

WASHINGTON (Reuters) – The U.S. Supreme Court on Monday refused to hear Apple (NASDAQ:) Inc’s bid to avoid paying about $440 million in damages for using patent licensing firm VirnetX Inc’s internet security technology without permission in features such as FaceTime video calling.

The justices rejected Apple’s appeal in the long-running case in which a federal jury in 2016 found that Apple had infringed VirnetX’s patents and awarded $302 million. A judge later increased that amount to $439.7 million including interest and other costs.

The case dates back to 2010 when Nevada-based VirnetX filed suit in federal court in the Eastern District of Texas accusing Cupertino, California-based Apple of infringing four patents for secure networks, known as virtual private networks, and secure communications links. VirnetX said Apple infringed with its FaceTime and VPN on Demand features in products such as the iPhone and iPad.

The U.S. Court of Appeals for the Federal Circuit in Washington, which specializes in patent disputes, upheld the judgment against Apple last year.

During the litigation, Apple and other companies requested that a tribunal of the U.S. Patent and Trademark Office review the validity of the VirnetX patents. The tribunal canceled key parts of the patents at issue in the case.

But in separate decisions also issued last year, the Federal Circuit set aside certain of the tribunal’s rulings, bringing VirnetX closer to collecting damages from Apple. Apple appealed to the Supreme Court, contending that the damages should be recalculated because the specific patents VirnetX accused it of infringing with FaceTime were nearly wiped out.

Apple in a court filing called the Federal Circuit’s refusal to entertain its demands “legally wrong and grossly unfair.” The company also said the lower courts impermissibly allowed VirnetX to request damages far beyond the value of the patented invention.

VirnetX told the justices: “The entire damages award … remains supported by claims that a jury – and the Federal Circuit – found valid years ago and that have not been canceled since.”

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