VirnetX patent win against Apple vacated by U.S. appeals court

FILE PHOTO: The Apple logo is displayed at an event at their headquarters in Cupertino, California, U.S. September 10, 2019. REUTERS/Stephen Lam/File Photo

(Reuters) - A U.S. appeals court on Friday voided a jury's calculation that Apple Inc AAPL.O should pay $503 million for infringing patents owned by licensing firm VirnetX Holdings Corp , setting the stage for another potential trial in a decade-old legal battle.

In a partial victory for VirnetX, the U.S. Court of Appeals for the Federal Circuit left in place a Texas jury’s finding that Apple iPhones infringed two VirnetX patents relating to secure communications technology.

The court reversed the jury’s infringement finding on two other patents, however. Based on that ruling, the court sent the case back to a Texas judge for further proceedings.

The Texas judge must consider whether to hold a new damages-only trial or to recalculate damages without holding one, the appeals court said.

VirnetX’s stock price dropped more than 50 percent on the news before recovering slightly in later trading.

Representatives of VirnetX and Apple did not immediately respond to requests for comment.

Zephyr Cove, Nevada-based VirnetX, which was founded by employees at government contractor Science Applications International Corp, holds patents related to secure networks, known as virtual private networks, and secure communications links.

VirnetX and Apple have been fighting over patents since 2010 in rollercoaster litigation that has triggered wild swings in the technology licensing company’s stock price.

The case at issue in Friday’s ruling, which went to trial in April 2018, is one of a handful of lawsuits VirnetX has brought against Apple alleging unauthorized use of patented technology.

Reporting by Jan Wolfe; editing by Jonathan Oatis and Steve Orlofsky