VirnetX Plunges After Patents Deemed Invalid in Apple Disputeby
U.S. patent office says all four patents are invalid.
Apple patent case scheduled for retrial in Texas Sept. 26.
The patents don’t cover new inventions, the Patent Trial and Appeal Board said in a series of decisions. Two of the rulings were based on challenges filed by Apple, while the other two were based on petitions filed by hedge fund Mangrove Partners LLC.
The decisions come less than two weeks before VirnetX and Apple are scheduled to square off in a Texas courtroom for the third time. A judge had tossed a $625.6 million verdict against Apple in August and ordered the new trial. Jury selection is scheduled for Sept. 26.
The patents legally remain valid and enforceable until all appeals are decided. VirnetX can ask the board to reconsider its decision, and if that doesn’t work it can go to the U.S. Court of Appeals for the Federal Circuit in Washington, which handles all patent cases from both the courts and the agency.
“If you’re trying this, and trying to put this out to the shorts and hurt VirnetX stock, this is what you do,” said VirnetX Chief Executive Officer Kendell Larsen. “The Federal Circuit is going to make the final determination.”
Apple has asked that the trial be postponed until after the patent office reviews are considered. VirnetX opposes that, and is instead asking the judge to reinstate the original verdict.
The courts and the agency look at patents differently –- courts presume patents are valid, while the agency does not. It’s not unusual for courts and the agency to come up with opposite conclusions on whether a patent should have been issued.
The information considered by the patent office already was looked at by the courts and “there was nothing new except that they used a lower standard,” Larsen said.
The dispute has become a saga for VirnetX, a spinoff of a government contractor that reported $1.6 million in revenue last year. The company has said it came up with unique ideas for secure communications only to have its inventions used by companies like Apple.
VirnetX fell 37 cents to $2.37 at 4:01 p.m. in New York trading.
Officials with the Apple didn’t immediately respond to queries seeking comment.