Citing Virus, Apple Wants Remote Wrap-Up Of $503M Verdict

By Kevin Stawicki
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Law360 (November 12, 2020, 3:00 PM EST) -- Apple Inc. is asking a Texas federal judge to conduct a post-trial hearing by phone after a jury slammed it with a $502.8 million verdict for infringing VirnetX Inc.'s network security patents, citing "hardship" the company's attorneys would face due to the coronavirus pandemic.

Instead of having its New York-based attorneys travel to Texas in late December and risk being forced to return home, quarantine for two weeks and miss seeing their families during the holidays, Apple asked the judge on Wednesday to make the hearings remote.

"Although it is now possible to 'test out' of the entire quarantine, doing so would still require team members returning to New York to quarantine from their families for a certain period of time over the holidays," Apple said in the notice. "Conducting the hearing remotely would obviate that hardship."

Apple is reeling from an October verdict that concluded a damages retrial held after a nearly identical award was thrown out on appeal. Apple and VirnetX have been fighting over the patents for more than a decade. VirnetX filed two infringement suits against Apple, one in 2010 and one in 2012 over newer products.

A post-trial hearing was set for Dec. 17 or 18, but Apple's attorneys said doing it remotely will help minimize risks associated with COVID-19.

"While Apple appreciates that the court may take steps to help minimize potential exposure to COVID-19, the situation across the country is now worse than it was over the summer, with nationwide cases hitting record highs," Apple said. "The pandemic is also resurging in Texas, including in Bowie County. A remote hearing would minimize the risk of contracting and spreading COVID-19 for all participants."

The filing says VirnetX doesn't oppose the motion, but declined to join it.

In a 2018 trial, a jury awarded VirnetX $502.6 million in damages after finding that Apple infringed four of its patents. The award later grew to nearly $600 million when interest and costs were added, but the Federal Circuit vacated it last year. It found that Apple had infringed only two of the patents, leading to the new trial on damages.

The Oct. 30 verdict came in the case that began in 2012. The Federal Circuit found last year that although the previous jury correctly held that an Apple feature called VPN On Demand infringed two of VirnetX's patents, it incorrectly found that the company's FaceTime application infringed two other patents.

The appeals court sent the case back for further proceedings on damages "given the reduced basis of liability." U.S. District Judge Robert W. Schroeder III decided in April that a new trial on damages was necessary. It was initially scheduled for August, but the judge moved it to October because of the coronavirus pandemic.

Between VirnetX's two suits against Apple, there have been 10 years of verdicts being thrown out and new trials being ordered by both the Federal Circuit and the trial court.

Representatives for the parties did not immediately respond to requests for comment Thursday.

The patents-in-suit are U.S. Patent Nos. 6,502,135 and 7,490,151.

VirnetX is represented by Brad Caldwell, Jason Cassady, John Austin Curry, Daniel Pearson, Hamad Hamad, Justin Nemunaitis, Chris Stewart, John Summers and Warren McCarty III of Caldwell Cassady & Curry PC and Johnny Ward of Ward Smith & Hill PLLC.

Apple is represented by Gregory Arovas, Robert Appleby, Jeanne Heffernan, Joseph Loy and Leslie Schmidt of Kirkland & Ellis LLP.

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.

--Additional reporting by Ryan Davis. Editing by Stephen Berg.

For a reprint of this article, please contact reprints@law360.com.

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