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Judge Tosses $625M Verdict Against Apple

(CN) — A federal judge vacated a $625 million patent-infringement verdict against Apple, finding that references to an earlier case during trial may have confused jurors and skewed their royalty finding.

In February, a federal jury in East Texas awarded VirnetX $625 million after finding that Apple's iOS operating system's FaceTime and virtual private network feature violated the Nevada software company's patents.

After a week-long trial before U.S. District Judge Robert W. Schroeder III, the eight-person jury unanimously concluded that Apple was "willful" in infringing on four patents held by VirnetX. VirnetX has sued Apple twice since 2010.

A Tyler, Texas, federal jury awarded VirnetX $368 million in damages for patent infringement in 2012, but the Federal Circuit tossed the damage award in 2014 and remanded for retrial.

During retrial, Apple did not contest the claim that from 2009 to 2013, the VPN feature infringed on VirnetX's patents. The jury awarded $335 million in damages for that period. It awarded an additional $290.7 million in damages for infringement since the first trial.

However, Schroeder on Friday vacated the $625 million verdict against Apple and ordered new, separate trials for each of VirnetX's two patent lawsuits against the tech giant.

The judge cited references to the original 2012 verdict as reasons why this year's trial was unfair to Apple.

"The court is left with the conclusion that repeated statements such as these—more than 50 in all, many of which were either redundant or gratuitous—tipped the balance towards unfairly prejudicing Apple," Schroeder wrote in a 15-page ruling.

Schroeder said that juror confusion over different versions of FaceTime "potentially spilled over into the jury's finding of infringement of iMessage" and mentions of the first trial "may have influenced the royalty rate selected by the jurors."

"Because only certain findings from the previous jury verdict were relevant to the consolidated case and in light of the repeated references to that prior verdict, there was a substantial risk that the jury would defer to the prior jury's findings altogether," the judge wrote. "To be clear, the consolidated case could very likely have been tried successfully—and fairly—had the [2012] verdict not been repeatedly mentioned, often unnecessarily, throughout the trial."

The first retrial will begin Sept. 26. The second will follow at a date yet to be determined.

VirnetX CEO Kendall Larsen said in a statement Monday that the company is "disappointed" by Friday's ruling.

"We are reviewing all our options and will follow the court's direction as we start preparing for these retrials," Larsen said.

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