• Market Crumbs

Apple Ordered To Pay In Patent Case

Image via Tim Gouw on Unsplash

A decade-long patent dispute between Apple and VirnetX took a step closer to coming to an end as a jury in Tyler, Texas took just 90 minutes to side with VirnetX and award the company $502.8 million in royalties, according to Bloomberg.

VirnetX, which has been described as a patent troll, has been waging a lengthy legal battle against Apple for infringing on its patents for secure communications technologies used in VPN on Demand and Apple's FaceTime. VirnetX tried to persuade the jury that it should receive more than $700 million in royalties, while Apple argued it should only pay $113 million.

"We thank the jury for their time and appreciate their consideration but are disappointed with the verdict and plan to appeal," a spokesperson for Apple said in a statement. "This case has been going on for over a decade, with patents that are unrelated to the core operations of our products and have been found to be invalid by the patent office. Cases like this only serve to stifle innovation and harm consumers."

If the verdict stands, it will be the second payment Apple must make to VirnetX following a $454 million payment it made in March as a result of a verdict involving earlier versions of the features. The most VirnetX received from its patent lawsuits before Apple was in 2010 when it reached a $200 million settlement with Microsoft.

Shares of VirnetX jumped nearly 25% on the news, but remain far below the levels from the early 2010's when the case was in its early stages.

VirnetX offers a platform called Gabriel, which builds upon the patents it relies on to generate royalty income, but reportedly hasn't seen the product gain traction. VirnetX says its patents are based on technologies the company developed for the Central Intelligence Agency.

With Apple planning to appeal the verdict, the David vs. Goliath patent fight isn't quite over yet and should be welcomed by the lawyers who can continue to bill the case.

Leftover Crumbs

  • Nestle acquires Freshly. Nestle announced it acquired food delivery startup Freshly in a deal valuing the company at $950 million as future payouts could make the deal worth up to $1.5 billion. Freshly, which delivers meals that can be cooked in three minutes, expects $430 million in sales this year while it ships more than one million meals per week. "Consumers are embracing ecommerce and eating at home like never before. It's an evolution brought on by the pandemic but taking hold for the long term," Nestle USA head Steve Presley said. Nestle acquired a minority stake in Freshly in 2017 as part of a $77 million funding round.

  • Sony eyes the Netflix of anime. Sony is reportedly nearing a deal to acquire anime-streaming service Crunchyroll in a deal valued at $957 million. Crunchyroll, which was founded in San Francisco in 2006, has 70 million free members and 3 million paying subscribers globally. According to The Association of Japanese Animations, the global anime market was worth about $21 billion in 2018 with about half of the total demand coming from Japan.

  • Dunkin' Brands agrees to deal. Inspire Brands announced Friday it has agreed to acquire Dunkin' Brands in an all-cash deal totaling $11.3 billion including debt. The deal equates to $106.50 per share, which is about a 20% premium to when the deal was first reported on October 23. Inspire Brands adds Dunkin' and Baskin-Robbins to its portfolio of restaurants which includes Arby's, Buffalo Wild Wings and Sonic Drive-In. "They will strengthen Inspire through their scaled international platform and robust consumer packaged goods licensing infrastructure, as well as add more than 15 million loyalty members," Inspire Brands CEO Paul Brown said.

  • Fed tweaks lending program. The Federal Reserve has lowered the minimum loan size to $100,000 from $250,000 for its Main Street Lending Program and is also easing restrictions on debt for companies already participating in the Paycheck Protection Program. The Main Street Lending Program has so far issued only $3.7 billion worth of loans despite having a capacity of $600 billion. According to the Fed, the changes are "two important ways to better target support to smaller businesses that employ millions of workers and are facing continued revenue shortfalls due to the pandemic."

  • Facebook surprised by new VR headset. Facebook CEO Mark Zuckerberg said the company's new virtual reality headset, the Oculus Quest 2, has "surpassed our expectations" as it received five times as many preorders as Facebook's previous model. The Oculus Quest 2 began shipping earlier this month and has a faster processor, lighter design and a better display compared to the original Oculus. "I think that the new Quest 2 product is extraordinary, I love using it," Zuckerberg said. "I'm really proud of the work that we’ve done there."