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VirnetX (VHC): $368M Patent Infringement Verdict Against Apple (AAPL) Upheld

 February 27, 2013 09:47 AM

(By Balachander) VirnetX Holding Corp. (NYSEAMEX: VHC) said a U.S. district court upheld a $368 million jury verdict against Apple Inc. (NASDAQ: AAPL).

Shares of the provider of Internet security software rose 5.01 percent to $35.66 in early Wednesday trading. The stock has been trading between $19.13 and $41.93 for the past 52 weeks.

A district judge in November 2012 awarded VirnetX over $368 million in a verdict against Apple for infringing four VirnetX patents related to virtual-private-network (VPN) technology used in Apple's FaceTime video-calling function.

[Related -Fusion-IO, Inc. (FIO): Can Fusion-IO Q2 Results Cheer Street?]

VirnetX's software and technology services are designed to facilitate secure communications for real-time communication applications such as instant messaging, VoIP, smart phones, eReaders and video conferencing.

VirnetX's patent portfolio includes 20 U.S. and 26 international patents and over 100 pending applications.

The court on Tuesday denied Apple's motion to reduce the damages awarded by the jury for past infringement and also denied Apple's request for a new trial on the liability and damages portions of the verdict, VirnetX said. 

In addition, the court ordered the companies to negotiate an ongoing royalty agreement within 45 days for future use of the technologies in dispute.

[Related -Google Inc (GOOG): Why Nest Labs Deal Is A Wakeup Call For Apple Inc.?]

"We look forward to negotiating a license with Apple that includes an ongoing royalty agreement," said VirnetX CEO Kendall Larsen.

Following the court order, VirnetX said it plans to withdraw its complaint filed with the United States International Trade Commission (ITC) against Apple Inc. and pursue comprehensive relief from Apple's infringement through the district court system.

Apple shares shed 0.63 percent to trade at $446.13 on Wednesday.

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