$625.6 Million VirnetX Case Tossed Out the Window as Stock Tumbles

$625.6 Million VirnetX Case Tossed Out the Window as Stock Tumbles
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We all remember that borderline nostalgic VirnetX vs. Apple courtroom saga, right? You know, the VirnetX — that Zephyr Cove, Nevada-based firm, whose revenue is essentially 100% dependent upon other’s licensing of its patents — most of which are related, in some way, shape, or form, to the concept of Voice over IP (VoIP) internet communications protocols.

Well, so far in 2016, there’s been a pretty good amount of back and forth between the two companies — specifically in regards to VirnetX’s filing of the aforementioned lawsuit against Apple. Under the terms of that judgment, VirnetX was awarded a whopping $625.6 million for damages due to Apple’s infringement of several patents having to do with FaceTime and iMessage.

Apple, for its part, had responded relatively quickly to that case — ultimately rushing to file (successfully) for a mistrial; however, humorously enough, that mistrial was almost immediately followed with an even more aggressive punch from VirnetX — and on, and on, and on it’s gone..

However, in an iconic decision ushered in by U.S. District Judge, Robert Schroeder, on Friday, the whole kit-and-caboodle $625.6 million patent infringement case was simply tossed out the door!

In handing down his decision on Friday, the Tyler, Texas judge cited how he thought it was rather “unfair” that VirnetX was able to combine, convince, scrutinize, and, likely in the process, confuse jurors — by presenting them with so many elements (patents) within a single lawsuit. (VirnetX had alleged that Apple infringed on a total of four patents).

“The [50+] repeated references to the prior jury verdict in the consolidated case resulted in an unfair trial,” Schroeder wrote.

Schroeder then ordered that the single case be retried as separate cases — which will commence on September 26th of this year — even despite the “incredibly similar” issues that were being considered at the time.

In any case, the penultimate outcome of this decision being handed down was a whopping 45% drop in VirnetX’ (VHC) stock price. At the sound of the opening bell on Wall Street Monday morning, VirnetX’s shares were trading at just $2.40 apiece — down about $1.93/share from their Friday afternoon levels.

What’s going to happen with this case is anyone’s best guess at this point; however it’s likely, albeit not yet etched in stone, that Apple will have to pay out “something” — though what that “something” will ultimately be is the million dollar question (no pun intended).

Fortunately for VirnetX, though: the firm was granted exclusive access to all four of the patents currently being contested about a year before Apple’s iconic iPhone was even a thing.. So yeah, now that iPhone is pretty much the thing, Apple might be in for a pretty contentious game of tug-of-war with this one.

We’ll keep you posted on any future developments!

What do you think about this case being tossed out last week? Is Apple off the hook, or like myself, do you think they’ll ultimately be liable for “something”? Let us know in the comments!


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