Jury To Decide If New Apple FaceTime Infringes, Says Judge
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Law360 (March 13, 2018, 6:50 PM EDT) -- Following a $439 million judgment that Apple products including FaceTime infringe VirnetX’s network security patents, an Eastern District of Texas judge has ruled that a jury must decide at another trial next month whether a redesigned version of FaceTime infringes as well.
In a ruling Friday, Judge Robert Schroeder III denied VirnetX Inc.’s motion for summary judgment that Apple Inc.’s new version of FaceTime infringes because it includes only minor changes that are legally irrelevant. There are factual questions on that issue that will have to be put to a jury at a trial set for April 2, the judge said.
"The parties’ arguments stem from a fundamental factual dispute with respect to the design and operation of the redesigned product, which the court declines to resolve at summary judgment," he wrote, calling it "a question of fact for the jury to resolve at trial."
VirnetX said that the only difference between the version of FaceTime found to infringe at the earlier trial and the one at issue in the upcoming trial involves a feature that is unrelated to its patent. But Apple responded that the changes in the new version are so significant that it can no longer infringe.
"The accused devices in this case are not essentially the same as the devices at issue in the [earlier] case," the judge said. "Apple has raised a question of material fact as to whether the redesigned version of FaceTime infringes the claims of the asserted patents."
The legal battle between Apple and VirnetX, a patent-licensing company that acquired the patents at issue from government contractor Science Applications International Corp., has been ongoing since 2010.
An Eastern District of Texas jury found that Apple products like FaceTime and VPN On Demand infringed in 2012 and ordered Apple to pay $368 million in damages. The same day, VirnetX filed a new suit accusing newer versions of Apple products of infringing.
The Federal Circuit later upheld the infringement finding in the first case, but threw out the damages award. Judge Schroeder then ordered the retrial in the first case and the infringement trial in the second case to occur at the same time, leading to a $625 million verdict against Apple in February 2016.
However, Judge Schroeder discarded that award months later, finding that it was unfair to Apple to combine both cases into one trial. He ordered them to be tried separately. In the damages retrial from the first case, the jury found in October 2016 that Apple owes more than $302 million in damages.
Judge Schroeder later increased the award to $439 million, including attorneys' fees and enhanced damages. Apple has appealed that ruling to the Federal Circuit.
The trial set to begin next month will decide whether the newer versions of Apple's product infringe VirnetX's patents.
In the meantime, the Patent Trial and Appeal Board has found that several of the VirnetX patents are invalid in challenges by Apple. VirnetX’s appeal of those decisions is pending at the Federal Circuit.
Counsel for Apple declined to comment on the summary judgment ruling. An attorney for VirnetX could not immediately be reached for comment Tuesday.
The patents-in-suits are U.S. Patent Numbers 6,502,135; 7,490,151; 7,418,504; and 7,921,211.
VirnetX is represented by Brad Caldwell, Jason Cassady, John Curry, Daniel Pearson, Hamad Hamad, Justin Nemunaitis, Chris Stewart, John Summers and Warren J. McCarty III of Caldwell Cassady & Curry PC, Robert Parker and Christopher Bunt of Parker Bunt & Ainsworth PC, and T. John “Johnny” Ward Jr. and Claire Abernathy Henry of Ward Smith & Hill PLLC.
Apple is represented by Robert Appleby, Gregory Arovas, Joseph Loy and Jeanne Heffernan of Kirkland & Ellis LLP, and Michael Jones and Allen Gardner of Potter Minton PC.
The case is VirnetX Inc. et al v. Apple Inc., case number 6:12-cv-00855, in the U.S. District Court for the Eastern District of Texas.
--Editing by Jack Karp.
