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VirnetX's $625M FaceTime lawsuit victory against Apple tossed, two retrials ordered

A federal judge has tossed out a February ruling requiring Apple to pay patent holding company VirnetX $625.5 million over secure communications patents used in FaceTime and iMessage, and has ordered two complete retrials.




U.S. District Judge Robert Schroeder noted in his ruling that jurors in the damages retrial were likely confused by multiple references to the earlier cases, and leaned too heavily on the previous jury rulings for damages determination.

"The repeated references to the prior jury verdict in the consolidated case resulted in an unfair trial," ruled Schroeder.

"We are disappointed," VirnetX Chief Executive Kendall Larsen said regarding the ruling. "We are reviewing all our options and will follow the court's direction as we start preparing for these retrials."

Apple has as of yet made no comment on the ruling.

VirnetX is mostly a patent aggregation company, with a single communications platform it launched in 2014, years after the litigation with Apple began. The VirnetX Gabriel small- and medium-sized business collaboration suite has seen few updates since the April 2014 update and December 2014 widening of the pre-release program.

The first trial found Apple's VPN on Demand feature, used in iOS 3 through iOS 6, in infringement of a pair of VirnetX patents. In addition, Apple was found to have willfully infringed on the patent portfolio with FaceTime, iMessage, and VPN on Demand implementations during the second trial.

Both verdicts were ultimately rejected on appeal in September 2015. The U.S. Court of Appeals for the Federal Circuit called for a damages retrial.

After a week, the retrial jury in East Texas Federal District Court made a unanimous decision against Apple's FaceTime, iMessage and VPN services use, as well as the devices running them, finding each in infringement of VirnetX intellectual property. VirnetX was awarded $625 million as a result. Apple immediately appealed the decision, leading to late Friday's retrial order.

In May, VirnetX called for a FaceTime ban, and an additional $190 million to penalize Apple for being a "poster child" for questionable patent-related legal tactics, on top of the $625 million it had been awarded.

The first of the two retrials will start on September 26. As a result, the VirnetX stock price has plummeted from $4.33 at the end of Friday's trading day to $2.51 per share.