Apple fined $368 million for violating VirnetX patents in FaceTime

Apple fined $368 million in FaceTime patent case

Apple has been fined $368 million after their video calling feature, FaceTime, was found to infringe on patents owned by a company called VirnetX, a company that provides solutions for secure internet communications. A US court ruled that Apple’s FaceTime product infringes on four patents by VirnetX. One of the patents at issue involved the ability to establish a secure communication link. Apple apparently has no option for appeal in this matter. VirnetX has also brought suit against a number of other larger companies over its patent portfolio. Natash Lomas of Techcrunch reports notes:

The BBC reports that the damages award is around half the amount VirnetX had originally sought. It also notes that VirnetX has previously secured a $200m settlement from Microsoft over similar claims.

The company, which has a patent portfolio of 20 U.S. and 26 international patents, has also brought cases against Cisco, Avaya and Siemens for allegedly infringing the same patents.

This is another in a recent string of legal defeats for Apple. Last week Apple was forced to amend a statement that had been ordered by a UK court that aknowledged that Samsung did not copy the iPad. A US judge also recently dismissed Apple’s case against Motorola Mobility.

The VirnetX case might also shed some light on why FaceTime isn’t open. When introduced in 2010, it was said that FaceTime would become an open standard. Many have speculated as to why that was. It may be that Apple found that they could not legally open FaceTime when some of the technology behind it was not industry-standard and under someone else’s patents. While it seemed a longshot in the first place, with the VirnetX victory, the hope of an open FaceTime, appears to be gone.

Source: Techcrunch

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Joseph Keller

News Writer for Mobile Nations. Fascinated by the ways that technology connects us.

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Reader comments

Apple fined $368 million for violating VirnetX patents in FaceTime


" was said that FaceTime would become an open standard."

It was said? Let's be perfectly clear about it, Steve Jobs said at the 2010 WWDC, and I quote:
"And we’re going to take it all the way. We’re going to the standards bodies, starting tomorrow, and we’re going to make FaceTime an open industry standard".

The way you posted sounded like it was a rumor, and not a direct quote from the CEO of Apple.

And the SDK documentation suggests they went back on that promise (or at least stopped plans to follow through) pretty quickly:

Set the farEndAUVersion field of the VoiceIOFarEndVersionInfo struct to this value if the remote end is a 3rd-party device following open FaceTime standards."

Introduced in iOS 4.2, removed (not deprecated, removed) after 4.3

Enough of this paitent war.. Apple started it n now every1 else is gettin involved in it.. its a mud sling now n every1 is trying to gain somethin or the other from it.

An oversimplification. Patents have been around a long before Apple existed and Apple are far from the the first to sue to enforce a patent.

yes i know... n companies have been suing each other frm long time. i m jus sayin in recent times Apple started suing every1.. claiming various things n have lost most of the verdicts n now ppl r doin the same thing to apple. i jus want companies to work togather share things n give us products that helps us... rather than proving a point.

Agreed. It's not a patent troll or a Chinese government proxy... Apple's got nobody to blame but themselves for this.

The more articles I read from Mr. Keller, the more I think he should quit hitting to bong before posting.

Apple should pay the fine and then buy the company to get their money back.

On a similar topic : I can still hear the late Mr Steve Jobs say "and boy have we patented it" when the Iphone came out in 2007. Which all proves that patents are not stainless steel.

It makes sense for them to be an acquisition target if they start winning a bit more - this was obvious to the big boys long ago but you can't fault Apple et al for trying to say the patent was too broad. The Markman Order made earlier this year was the first hint that their patent is as broad as it is. It's not just Facetime it's any secure communication over 4G - more on that later.

Thus VHC with a few more wins under it's belt will effectively get license fees from anybody operating 4G devices since the patented technology is built into the 4G specification as laid out by 3GPP - in the same why as MPEG LA administers the patent behind H.264 - which makes up the vast majority of content encoded into MP4 media files.

Any communication over 4G is secure by definition since if it wasn't secure it would not conform to part the 4G specification. Someone has to come up with these specifications, provide working models and rigorous proof that satisfies the various standard committees, in this case it was VHC who purchased and developed their patents (the secure part of SIP) before 4G was set and ensured they met the design criteria.

To be clear this is about securing the wireless communication - the stuff your device 'shouts' as loud as it can in all directions. This isn't about SSL, VPN or HTTPS... all those run on top of SIP since SIP is the actual method by which those packets will be sent across 4G.

3GPP negotiated patent royalties with VHC long ago and Apple and others chose to try their luck; after all spending tens of millions on court costs and lawyers is a lot cheaper than than $200M+license fees paid out to VHC in recent agreements.

It's a fascinating subject that isn't by any mean unique to telecommunications.