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VirnetX $368 Million Verdict Against Apple Upheld by Judge

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Feb. 27 (Bloomberg) -- VirnetX Holding Corp.’s $368.2 million jury victory against Apple Inc. over patents for virtual-private-network technology was upheld by a federal judge.

U.S. District Judge Leonard Davis in Tyler, Texas, denied Apple’s requests for a new trial or a reduction in the damage award. VirnetX lost its bid for an order that would have limited Apple’s ability to provide virtual private networks on its products, and the judge ordered the two sides to confer within the next 45 days to work out a license for future royalties.

A federal jury in Tyler in November said Apple’s VPN on Demand and FaceTime features, used on the iPhone, iPod Touch and iPad as well as Mac computers, infringed four VirnetX patents. There was “substantial evidence” to support both the finding of infringement and the damage award, Davis wrote yesterday.

“We are extremely pleased with the court’s order in our suit against Apple,” VirnetX Chief Executive Officer Kendall Larsen said in a statement. “We look forward to negotiating a license with Apple that includes an ongoing royalty agreement.”

VirnetX rose $1.62, or 4.8 percent, to close at $35.58 in New York trading.

Amy Bessette, a spokeswoman for Cupertino, California-based Apple, said the company had no comment.

VirnetX, based in Zephyr Cove, Nevada, had asked for at least $708 million in the trial, while Apple argued the patents were worth no more than $9.1 million. VirnetX also said it would drop its U.S. International Trade Commission case against Apple over other patents and instead pursue further damages in the Texas court.

VirnetX had won a $200 million settlement from Microsoft Corp. in 2010 over the same technology and has claims pending against Cisco Systems Inc. A trial on the Cisco claims is scheduled to begin March 4.

The case at trial is VirnetX Inc. v. Cisco Systems Inc., 10cv417, U.S. District Court for the Eastern District of Texas (Tyler).

To contact the reporters on this story: Susan Decker in Washington at; Andrew Cinko in New York at

To contact the editor responsible for this story: Bernard Kohn at

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