|VirnetX Slays Apple in FaceTime Patent Battle|
Antoine Gara - The Street FEB 27, 2013 2:05 PM
VirnetX wins a major battle against Apple as it braces for an IP fight with Cisco and Avaya.
As hedge funder David Einhorn continues to press a shareholder revolt against Apple
On Wednesday, VirnetX
VirnetX's patent infringement claim stems from Apple's FaceTime chat program, which is currently a popular feature on the company's iPhone 5, iPad, and iPod mobile devices and its iMac and MacBook PCs.
With the court ruling, VirnetX will receive about $330,000 per day until it can reach a royalty agreement with Apple on the patents. It doesn't appear Apple will be able to challenge the court's ruling, which affirms a late November jury decision in VirnetX's favor.
"We are extremely pleased with the outcome of our suit with Apple," said Kendall Larsen, VirnetX CEO and president. "This victory further establishes the importance of our patent portfolio."
While the $330,000 daily payments or a royalty agreement are unlikely to dent Apple's financials, the ruling represents what could be a major revenue stream for the company in coming quarters as it continues to spend on its patent monetization efforts.
The patent infringement claim affirms VirnetX's position as a key player in the legal fights currently underway in Silicon Valley.
The company, which has been publicly traded since the late 1990s, has seen its shares recover from low single digit stock prices as a patent litigation for features on mobile intensified in recent years.
In the past five years, VirnetX's shares have surged nearly 600%. The company began to successfully litigate major patent infringement claims against the likes of Apple and Siemens (NYSE:SI)
Unlike Einhorn and his fight against Apple for a preferred dividend, VirnetX's battle against tech sector titans is unlikely to end anytime soon.
In March, the firm will pursue infringement claims against Cisco
In January, William Blair analysts highlighted that the Siemens ruling, and a licensing agreement with the Enterprise Communications division of the German conglomerate may help VirnetX in getting royalty agreements with Cisco and Avaya for its IP private branch exchange patents.
VirnetX shares rose over 5% to $35.91 in early afternoon trading on Wednesday. After big 2012 stock gains, VirnetX's market cap now stands at $1.84 billion.
Apple has not yet responded to TheStreet's request for comment on this story.