This past Tuesday I wrote that "reports are coming in that Judge Schroeder (Eastern District of Texas) on September 29 entered a memorandum opinion and order awarding VirnetX $41.3 million in enhanced damages and another $96 million in costs, attorneys' fees, and interest, on top of a damages award $302 million, in a suit against Apple. For coverage, see, e.g., this story on Ars Technica. Apparently the opinion and order have now been unsealed, but as of this morning it isn't showing up on Lex Machina." Professor Christopher Seaman (Washington & Lee University) has now posted the opinion on Scribd and has authorized me to publish the following guest post summarizing it:
The district court found that Apple willfully infringed VirnetX’s patents by selling products that contained the accused features for a number of months (10 months for VPN on Demand, 5 months for FaceTime) after the initial jury verdict in 2012 found that Apple infringed and that the patents in suit were not invalid. The court’s reasoning (see pp. 29-38) is focused on Apple’s post-verdict conduct, finding that “Apple’s continued sales after the verdict of products with the [infringing] features [was] unreasonably risky or reckless.” (p. 35) It rejected Apple’s claim that the PTO’s grant of a inter partes reexamination into the patents after the verdict made its conduct not willful/egregious (appeals of the reexam proceedings are still pending, but at least some claims of two of the patents-in-suit were cancelled by the PTAB in July). Applying the Read factors (pp. 38-50), it awarded a 50% enhancement of the royalty rate during the relevant time frame, resulting an enhancement of approx. $41 million, even though the court concludes that “VirnetX has not presented any evidence of copying,” nor did it find any attempt to conceal the alleged misconduct. The court also awarded attorney’s fees under 285 in part for VirnetX for the September 2016 trial.