Apple fans have an opportunity to make a killing by investing in one of their adversaries.
A recent Dallas Morning News editorial blamed so-called patent trolls for Apple closing two stores in Plano and Frisco. My law firm represents several of the businesses described as "opportunistic companies" that "exploit the courts and our patent law." In fact, Apple is the opportunistic company.
Apple has lost multiple trials in the U.S. District Court for the Eastern District of Texas, including some cases won by my law firm, Caldwell Cassady & Curry. Our verdicts against Apple include $533 million (2015), $625 million (2016), $302 million (2016), $22 million (2016) and $502 million (2018).
In three of these trials, we represented Nevada-based VirnetX Inc. in cases involving the technology that enables the popular FaceTime feature to work on Apple's iPhones and other company products. VirtnetX, a publicly traded company, owns a valuable patent portfolio that covers secure communications technology, and its patented ideas originated with a group of inventors from Science Applications International Corp., the respected defense contractor and technology supplier.
One of the main inventors of VirnetX's patented technology is a former chief system architect and assistant vice president at SAIC. Another holds a Ph.D. in electrical engineering and previously worked as assistant vice president and division manager at SAIC.
The reason Apple was sued is because the company has never licensed VirnetX's technology. Instead, Apple has used its vast resources to drag VirnetX through trial after trial and appeal after appeal. Despite having had multiple opportunities, Apple has never won at trial against VirnetX because it has never been able to muster a defense that jurors found credible.
In 2013, Apple modified FaceTime to avoid infringing VirnetX's patents. This redesign was so expensive that it was abandoned after only three months, and Apple again modified FaceTime to resume infringing VirnetX's patents. Meanwhile, Apple misrepresented this fact in litigation and claimed that it was continuing to use its expensive redesign. After the truth was uncovered, a Federal District Court judge found that Apple had tried to conceal its infringement. But to this day — after nearly a decade in court — Apple has never paid VirnetX one penny for using its technology.
Who is really the "opportunistic company" here? Apple has made more than a trillion dollars selling products that rely on VirnetX's technology. Even if it did not originally intend to infringe VirnetX's patents, Apple certainly made a cold calculation to resume its infringement after its redesign failed —knowing that it would take VirnetX years to get any relief in court.
And who is really "exploiting" the courts? For one, it's entirely prudent to file cases in a proper legal venue such as the Eastern District, where the judges are very experienced in patent law and adept at identifying and managing any cases that are not brought with good reason. It's also important to note that, at any point in time, Apple could have decided to take responsibility and license VirnetX's technology on fair terms. Instead, it has engaged in litigation misconduct while trying to string out the proceedings to avoid paying anything.
If Apple officials want to move out of Frisco, that is their prerogative. But let's not pretend that Apple is a victim.
