Intellectual Property > IP Newsflash > Eastern District of Texas Court Sets Aside Apple Verdict, Citing Prejudicial References to Earlier Proceedings
12 Aug '16

On August 10, 2016, plaintiff VirnetX argued that Apple received a fair trial when the jury handed down a $625 million verdict against it. This comes after U.S. District Judge Robert W. Schroeder III of the Eastern District of Texas set aside the jury’s verdict, citing potential fairness issues based on repeated references to earlier litigation between these two parties.

This case began in 2010, when VirnetX sued Apple, alleging infringement of two communication technology patents. VirnetX won a jury trial in 2012 and the jury awarded $368 million in damages. In 2014, the Federal Circuit overturned the award. On retrial, in February 2016, the jury awarded $334.9 million in damages and also found that Apple infringed two additional VirnetX patents, asserted in a second litigation, awarding an additional $290.7 million.

Recently, however, Judge Schroeder granted Apple a new trial, finding the jury could have been prejudiced by the more than 50 statements concerning the first trial that were made during the second. One of Judge Schroeder’s main concerns was the fact that only certain findings from the previous verdict were relevant to the second litigation and that there was “a substantial risk” that the second jury would simply defer to the findings of the first jury. Judge Schroeder also stated that this was not an easy decision due to the time and effort both parties have invested in this litigation, now in its sixth year.

On Wednesday, VirnetX challenged Judge Schroeder’s decision to grant a new trial, arguing that (1) the court’s order does not follow 5th Circuit precedent governing new trials, (2) no objective evidence supports an inference of jury confusion, (3) the Court’s analysis of Applied Medical v. U.S. Surgical (Fed. Cir. 2006) was not correct and (4) the “most damning facts” from the previous trial were kept from the jury. We will continue to follow the briefing on this issue, but as it stands, Judge Schroeder’s ruling could result in the loss of another large verdict for VirnetX.

VirnetX Inc. v. Apple Inc., Nos. 6:10-cv-00417, 6:12-cv-00855 (E.D. Tex. 2016).