Case 6:12-cv-00855-RWS Document 1037 Filed 01/15/21 Page 1 of 18 PageID #: 69049
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
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`VIRNETX INC., et al.,
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`Plaintiffs,
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`v.
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`APPLE INC.,
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`Defendant.
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`CIVIL ACTION NO. 6:12-CV-00855-RWS
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`(Unsealed and Corrected)
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`ORDER
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`Before the Court are (1) Defendant Apple Inc.’s Omnibus Motion for Judgment as a Matter
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`of Law Under Rule 50(b) and for a New Trial (Docket No. 1012) and (2) Plaintiff VirnetX Inc.’s
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`Motion for Entry of Judgment and Equitable and Statutory Relief (Docket No. 1013). The Court
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`heard argument on both motions on December 17, 2020. As set forth below, Apple’s motion for
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`JMOL and for new trial is DENIED, and VirnetX’s motion for entry of judgment is GRANTED-
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`AS-MODIFIED.
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`BACKGROUND
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`This dispute between VirnetX and Apple, now spanning more than a decade, has attained
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`Dickensian proportions rivaling Jarndyce and Jarndyce.1 An overview of the history of this matter
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`provides helpful context for the Court’s opinion.
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`1 “Jarndyce and Jarndyce drones on. This scarecrow of a suit has, over the course of time, become so complicated,
`that no man alive knows what it means. The parties to it understand it least; but it has been observed that no two
`Chancery lawyers can talk about it for five minutes without coming to a total disagreement as to all the premises.
`Innumerable children have been born into the cause; innumerable young people have married into it; innumerable old
`people have died out of it. Scores of persons have deliriously found themselves made parties in Jarndyce and Jarndyce
`without knowing how or why; whole families have inherited legendary hatreds with the suit. The little plaintiff or
`defendant, who was promised a new rocking-horse when Jarndyce and Jarndyce should be settled, has grown up,
`possessed himself of a real horse, and trotted away into the other world. Fair wards of court have faded into mothers
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`Case 6:12-cv-00855-RWS Document 1037 Filed 01/15/21 Page 2 of 18 PageID #: 69050
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`VirnetX sued Apple on August 11, 2010, alleging infringement of U.S. Patent Nos.
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`6,502,135 (“the ’135 patent”), 7,418,504 (“the ’504 patent”), 7,490,151 (“the ’151 patent”) and
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`7,921,211 (“the ’211 patent”). Case No. 6:10-cv-417 (“’417 action”), Docket No. 1. On
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`November 6, 2012, a jury found that the first versions of Apple’s accused VPN On Demand and
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`FaceTime features infringed the asserted patents and that the asserted patents were not invalid.
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`’417 action, Docket No. 790. That same day, VirnetX filed the instant case, accusing several of
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`Apple’s redesigned products of infringing the same patents. See Docket No. 1.
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`In the ’417 action, Apple and VirnetX both filed post-trial motions, which the Court
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`resolved in a memorandum opinion. ’417 action, Docket No. 851. On appeal, the United States
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`Court of Appeals for the Federal Circuit affirmed-in-part, reversed-in-part and remanded for
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`further proceedings. ’417 action, Docket No. 853; VirnetX, Inc. v. Cisco Sys., Inc., 767 F.3d 1308,
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`1313–14 (Fed. Cir. 2014). Specifically, the Federal Circuit affirmed the jury’s finding of
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`infringement by VPN On Demand and affirmed the Court’s denial of Apple’s motion for judgment
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`as a matter of law on invalidity. Id. The court vacated the infringement finding for FaceTime
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`based upon a change in claim construction, holding that the term “secure communication link”
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`requires both “security and anonymity,” and vacated damages for VPN On Demand and FaceTime
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`because it found that the jury had relied on a flawed damages model. Id. at 1314.
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`After receiving the Federal Circuit’s mandate, the Court solicited the parties’ proposals on
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`the best path forward. ’417 action, Docket No. 855. VirnetX proposed that the Court consolidate
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`the remaining issues in the ’417 action with the impending trial in the ’855 action. ’417 action,
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`Docket No. 864 at 4. Apple opposed consolidation. ’417 Action, Docket No. 873 at 45:20–46:6.
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`After a status conference on March 10, 2015, the Court consolidated the ’855 and ’417 actions,
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`and grandmothers; a long procession of Chancellors has come in and gone out.” CHARLES DICKENS, BLEAK HOUSE
`4–5 (George D. Sproul, New York 1902).
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`Case 6:12-cv-00855-RWS Document 1037 Filed 01/15/21 Page 3 of 18 PageID #: 69051
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`designating this action as the lead case with a revised schedule. Docket No. 220. After extensive
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`motion practice (see Docket Nos. 315, 317–323, 326; see also Docket Nos. 362, 468), the
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`consolidated action was tried to a jury, which returned a verdict finding infringement of all four
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`asserted patents.
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`Again, both parties filed post-trial motions. Docket Nos. 462, 463. On July 29, 2016, the
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`Court granted Apple’s Motion for a New Trial Based Upon the Consolidation of Cause Nos. 6:10-
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`cv-417 and 6:12-cv-855. Docket No. 500. The Court reasoned that the consolidation and the
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`parties’ repeated discussion of the previous jury verdict resulted in an unfair trial. Id. at 14. In its
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`Order, the Court explained that “Cause No. 6:10-cv-417 will be retried with jury selection to begin
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`on September 26, 2016, unless the parties agree otherwise on an alternative date, and immediately
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`followed by a second trial on the issue of willfulness. Cause No. 6:12-cv-855 will be retried after
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`Cause No. 6:10-cv-417.” Id. at 15.
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`After another round of extensive motion practice (see, e.g., ’417 action, Docket Nos. 930–
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`931, 937, 944–945), the ’417 action was again tried to a jury. The jury found that FaceTime
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`infringed the ’211 and ’504 patents and awarded approximately $302 million in damages for the
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`collective infringement by the VPN On Demand and FaceTime features in the accused Apple
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`products. ’417 action, Docket No. 1025. After the September trial, both parties submitted post-
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`trial motions (see ’417 action, Docket Nos. 1018–1019, 1047, 1062–1063), which the Court
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`resolved in a memorandum opinion (Docket No. 1079). Apple appealed the ’417 action’s final
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`judgment, and the Federal Circuit summarily affirmed. See ’417 case, Docket Nos. 1079, 1089,
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`1091; see also VirnetX Inc. v. Cisco Sys., Inc., 748 F. App’x 332 (Fed. Cir. 2019).
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`Meanwhile, on February 9, 2017, the Court requested that the parties meet and confer about
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`the timing of the ’855 trial and propose a schedule. The parties each filed a response (Docket Nos.
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`Case 6:12-cv-00855-RWS Document 1037 Filed 01/15/21 Page 4 of 18 PageID #: 69052
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`519, 520), and Apple simultaneously filed a motion to stay (Docket No. 518). The Court denied
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`Apple’s motion (Docket Nos. 527, 553) and set the case on a schedule (Docket No. 539).
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`The Court held a jury trial in this matter in April 2018. The trial was bifurcated into (1) a
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`liability and damages phase and (2) a willfulness phase, which were tried in succession to one jury.
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`After the liability and damages phase, the jury returned a verdict finding that both VPN On
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`Demand and FaceTime infringed each asserted patent and awarding $502,567,709 in damages.
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`Docket No. 723. After the willfulness phase, the jury returned a verdict that Apple’s infringement
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`was willful. Docket No. 729. Both parties filed post-trial motions, which the Court resolved in a
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`memorandum opinion. Docket No. 798. Apple appealed. Docket No. 812. The Federal Circuit
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`affirmed-in-part, reversed-in-part and remanded for further proceedings. See VirnetX Inc. v. Apple
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`Inc., 792 F. App’x 796 (Fed. Cir. 2019). The Federal Circuit affirmed this Court’s finding that
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`Apple was precluded from asserting its invalidity defenses and the jury’s finding that redesigned
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`VPN On Demand infringed the ’151 and ’135 patents. Id. at 803, 806. The Federal Circuit vacated
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`the infringement finding for FaceTime based on another change in claim construction, holding that
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`the term “domain name service system” incorporated the construction for “domain name service.”
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`Id. at 809. The Federal Circuit then left it to the parties and this Court “to consider in the first
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`instance relevant aspects of whether to hold a limited damages-only retrial given the reduced basis
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`of liability.” Id. at 813.
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`After receiving the mandate, the Court ordered the parties to meet and confer and inform
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`the Court their respective positions on the necessity of a damages-only retrial. Docket No. 821.
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`The parties filed a notice indicating that they could not agree and proposing a briefing schedule on
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`the issue. Docket No. 822. Following briefing (see Docket Nos. 824, 825, 828, 830), the Court
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`denied VirnetX’s request that the Court enter judgment on the prior jury verdict. Docket No. 840.
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`Case 6:12-cv-00855-RWS Document 1037 Filed 01/15/21 Page 5 of 18 PageID #: 69053
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`Specifically, the Court found that VirnetX had not shown that departure from the normal rule
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`requiring a new trial was warranted because the jury’s verdict did not necessitate a feature-
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`independent royalty rate and Apple had not waived its right to seek a new trial. Id. at 12, 16. The
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`Court entered a docket control order setting trial for August 17, 2020, and providing for a brief
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`discovery period. Docket No. 849. After extensive motion practice (see Docket Nos. 852, 893,
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`895, 896, 956) and a COVID-related delay (see Docket Nos. 914, 934), the damages issues were
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`tried to a jury in October 2020. The jury returned a verdict awarding VirnetX $0.84 per infringing
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`unit for a total of $502,848,847.20 in damages. Docket No. 977.
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`Apple now seeks JMOL under Rule 50(b) of the Federal Rules of Civil Procedure and a
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`new trial. Docket No. 1012. VirnetX moves for entry of judgment, costs, supplemental damages,
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`an ongoing royalty and pre- and post-judgment interest. Docket No. 1013.
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`APPLICABLE LAW
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`Judgment as a matter of law is only appropriate when “a reasonable jury would not have a
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`legally sufficient evidentiary basis to find for the party on that issue.” FED. R. CIV. P. 50(a). “The
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`grant or denial of a motion for judgment as a matter of law is a procedural issue not unique to
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`patent law, reviewed under the law of the regional circuit in which the appeal from the district
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`court would usually lie.” Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1332 (Fed. Cir.
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`2008).
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`Under Fifth Circuit law, a court is to be “especially deferential” to a jury’s verdict and must
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`not reverse the jury’s findings unless they are not supported by substantial evidence. Baisden v.
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`I’m Ready Prods., Inc., 693 F.3d 491, 499 (5th Cir. 2012). “Substantial evidence is defined as
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`evidence of such quality and weight that reasonable and fair-minded men in the exercise of
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`impartial judgment might reach different conclusions.” Threlkeld v. Total Petroleum, Inc., 211
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`Case 6:12-cv-00855-RWS Document 1037 Filed 01/15/21 Page 6 of 18 PageID #: 69054
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`F.3d 887, 891 (5th Cir. 2000). The Court will “uphold a jury verdict unless the facts and inferences
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`point so strongly and so overwhelmingly in favor of one party that reasonable men could not arrive
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`at any verdict to the contrary.” Cousin v. Trans Union Corp., 246 F.3d 359, 366 (5th Cir. 2001);
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`see also Int’l Ins. Co. v. RSR Corp., 426 F.3d 281, 296 (5th Cir. 2005). However, “[t]here must
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`be more than a mere scintilla of evidence in the record to prevent judgment as a matter of law in
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`favor of the movant.” Arismendez v. Nightingale Home Health Care, Inc., 493 F.3d 602, 606 (5th
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`Cir. 2007) (citing Laxton v. Gap, Inc., 333 F.3d 572, 577 (5th Cir. 2003)).
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`In evaluating a motion for judgment as a matter of law, the court must “draw all reasonable
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`inferences in the light most favorable to the verdict and cannot substitute other inferences that [the
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`court] might regard as more reasonable.” E.E.O.C. v. Boh Bros. Const. Co., L.L.C., 731 F.3d 444,
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`451 (5th Cir. 2013). Although the court must review the record as a whole, it must disregard all
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`evidence favorable to the moving party that the jury is not required to believe. Ellis v. Weasler
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`Eng’g Inc., 258 F.3d 326, 337 (5th Cir. 2001). However, a court may not make credibility
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`determinations or weigh the evidence, as those are solely functions of the jury. See id. (citing
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`Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150–51 (2000)). The Court gives
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`“credence to evidence supporting the moving party that is uncontradicted and unimpeached if that
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`evidence comes from disinterested witnesses.” Arismendez, 493 F.3d at 606.
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`Under Federal Rule of Civil Procedure 59(a), a new trial may be granted on any or all
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`issues “for any reason for which a new trial has heretofore been granted in an action at law in
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`federal court.” Rule 59(a)(1)(A). The Federal Circuit reviews the question of a new trial under
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`the law of the regional circuit. Z4 Techs., Inc. v. Microsoft Corp., 507 F.3d 1340, 1347 (Fed. Cir.
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`2007). The court can grant a new trial “based on its appraisal of the fairness of the trial and the
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`reliability of the jury’s verdict.” Smith v. Transworld Drilling Co., 773 F.2d 610, 612–13 (5th Cir.
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`Case 6:12-cv-00855-RWS Document 1037 Filed 01/15/21 Page 7 of 18 PageID #: 69055
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`1985). “Courts grant a new trial when it is reasonably clear that prejudicial error has crept into the
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`record or that substantial justice has not been done, and the burden of showing harmful error rests
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`on the party seeking the new trial.” Sibley v. Lemaire, 184 F.3d 481, 487 (5th Cir. 1999) (quoting
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`Del Rio Distributing, Inc. v. Adolph Coors Co., 589 F.2d 176, 179 n.3 (5th Cir. 1979)). “A new
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`trial may be granted, for example, if the district court finds the verdict is against the weight of the
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`evidence, the damages awarded are excessive, the trial was unfair, or prejudicial error was
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`committed in its course.” Smith, 773 F.2d at 612–13. The decision to grant or deny a new trial is
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`committed to the sound discretion of the district court. See Allied Chem. Corp. v. Daiflon, Inc.,
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`449 U.S. 33, 36 (1980). “[N]ew trials should not be granted on evidentiary grounds unless, at a
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`minimum, the verdict is against the great not merely the greater weight of the evidence.” Conway
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`v. Chem. Leaman Tank Lines, Inc., 610 F.2d 360, 363 (5th Cir. 1980).
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`DISCUSSION
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`I.
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`Apple’s Omnibus Motion for Judgment as a Matter of Law Under Rule 50(b) and for
`a New Trial (Docket No. 1012)
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`A.
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`Apple is Not Entitled to Judgment as a Matter of Law
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`Apple’s motion presents familiar issues. When ruling on Apple’s 2018 post-trial motions,
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`the Court “struggle[d] to identify a single basis Apple provide[d] for its JMOL on damages that it
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`ha[d] not already considered at length in the context of Daubert motions and the 417 post-trial.”
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`Docket No. 798 at 26. The same struggle presents itself here. Apple, for at least the third time
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`across the ’417 and ’855 actions, argues that (1) the jury’s damages award is not tied to the
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`invention’s footprint in the marketplace; (2) no reasonable jury could rely on the VoIP licenses;
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`(3) Apple is entitled to an offset for units that included Skype; and (4) no reasonable jury could
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`award more than Apple’s expert’s prescribed royalty rate per unit. In fact, Apple’s motion presents
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`only a single new ground for JMOL: that VirnetX is not entitled to damages on invalid patents.
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`Page 7 of 18
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`Case 6:12-cv-00855-RWS Document 1037 Filed 01/15/21 Page 8 of 18 PageID #: 69056
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`Because Apple asserts that the reduced basis for liability justifies revisiting previously rejected
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`positions, the Court will consider each argument below.2
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`1.
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`The Claimed Invention’s “Footprint”
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`Apple submits that, because VirnetX accused a single implementation of redesigned VPN
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`On Demand (“VOD”) of infringement and because VOD has other, noninfringing modes of
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`operation, the damages award is greater than VOD’s footprint in the marketplace. Docket No.
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`1012 at 8–9. Apple made the same argument in 2018, and the Court rejected it. Docket No. 798
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`at 20–22, 29. The reduced basis of liability does not impact the Court’s prior reasoning: then, as
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`now, only VOD’s infringement of the ’135 and ’151 patents was relevant to the issue. Apple is
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`not entitled to JMOL on this basis.
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`2.
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`Reliance on the VoIP Licenses
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`Apple next argues that Mr. Weinstein failed to account for the differences between the
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`Voice-over-IP licenses he considered and the hypothetical VirnetX-Apple license. Specifically,
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`Apple argues that: (1) each VoIP license is for a longer period of time and for more patents than
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`the hypothetical license; (2) the VoIP licenses cover products that are less complex and have fewer
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`features than the accused products; (3) the VoIP licenses were litigation licenses; (4) the VoIP
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`licenses are based on the entire market value rule; (5) the VoIP licenses defined licensed products
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`in terms that would exclude Apple’s accused products; and (6) Mr. Weinstein devalued the
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`Microsoft license. Docket No. 1012 at 10–14. The Court considered and rejected arguments (1)–
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`(3) and (6) in 2018. See Docket No. 798 at 26–27.
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`2 VirnetX asserts that Apple’s repeated arguments are barred by collateral estoppel. The Court already found that the
`damages questions between the ’417 action and this one are not identical for purposes of issue preclusion. Docket
`No. 798 at 26; Docket No. 553 at 7. That finding applies with the same force here.
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`Page 8 of 18
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`Case 6:12-cv-00855-RWS Document 1037 Filed 01/15/21 Page 9 of 18 PageID #: 69057
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`Each of Apple’s criticisms, both new and old, are essentially Daubert attacks on Mr.
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`Weinstein’s opinion, and the Court has already held that Apple’s concerns are related to the weight
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`of this testimony, not its admissibility. Docket No. 362 at 3 (“Although Apple presents valid
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`criticisms of Dr. Jones’s opinions, they go to the weight of the evidence rather than
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`admissibility.”). The reduced basis of liability does not alter this fact. Apple could, and did, cross-
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`examine Mr. Weinstein on these points and make the same arguments to the jury. Mr. Weinstein
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`explained the factual circumstances surrounding each license he relied on at length. See 10/28/20
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`PM Tr. at 694:20– 707:2. The Court still cannot identify any error in the jury relying on these
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`licenses in determining the appropriate royalty rate in this case.
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`3.
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`Skype Offset
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`Apple next argues, for the third time, that it “is entitled to an offset for the devices that are
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`already licensed to avoid double recovery,” specifically, devices that already include Skype.
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`Docket No. 1012 at 15. As was true twice before, “Apple never pled a license defense, and Apple
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`presented no evidence that its devices are shipped with Skype included.” Docket No. 798 at 31
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`(citing ’417 action, Docket No. 1079 at 17). “Apple also provides no explanation for why the
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`actions of its end-users to modify its product post-sale should bring Apple under the protection of
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`third-party licenses.” Id. That remains the case here. Because Apple articulates no basis for the
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`Court to reconsider multiple prior rulings on this issue, it is not entitled to JMOL on this basis.
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`4.
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`Invalidity of the Asserted Patents
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`Apple next contends that VirnetX cannot be awarded damages for infringement of invalid
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`claims. Docket No. 1012 at 16. It submits that, because the PTAB in July issued Final Written
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`Decisions holding that the asserted claims of the ’135 and ’151 patents are unpatentable, Apple
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`cannot be liable for infringing them. Id. at 16–18. The problem with Apple’s argument is that
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`Case 6:12-cv-00855-RWS Document 1037 Filed 01/15/21 Page 10 of 18 PageID #: 69058
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`none of the asserted claims has been cancelled—that only occurs once “the time for appeal has
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`expired or any appeal has terminated.” 35 U.S.C. § 318. The PTAB’s decisions are subject to an
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`appeal that the Federal Circuit has yet to consider. Apple’s parallel assertion that VirnetX is
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`collaterally estopped from defending the validity of the asserted patents is equally unavailing—
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`both infringement and validity have been litigated, resolved and affirmed by the Federal Circuit in
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`VirnetX’s favor; neither are at issue in this case. Tellingly, none of the authority Apple cites bears
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`any resemblance to the procedural posture of this case or denied damages based on non-final
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`administrative determinations. Accordingly, none of them supports denying VirnetX the damages
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`the jury awarded it here. Apple is not entitled to JMOL on this basis.
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`5.
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`Royalty Rate
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`Apple finally asserts that “no reasonable jury” could disagree with its damages expert.
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`Docket No. 1012 at 18–19. Now, as in 2018, the Court declines to substitute its judgment for that
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`of the jury and will not reweigh the evidence and credit Apple’s expert over Mr. Weinstein. The
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`jury was free to disbelieve Apple’s expert and credit Mr. Weinstein’s testimony, which provided
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`substantial evidence for its verdict. i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831, 848 (Fed. Cir.
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`2010). Accordingly, Apple’s motion for JMOL on this basis is denied.
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`B.
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`Apple is not Entitled to a New Trial on Damages
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`Apple advances five bases for a new trial on damages: (1) Mr. Weinstein’s testimony
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`should have been excluded; (2) the PTO’s unpatentability findings should have been introduced to
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`the jury; (3) the EMVR and hypothetical negotiation instructions were improper; (4) Apple should
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`have been permitted to introduce evidence of the Microsoft determination; and (5) the verdict is
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`excessive. Docket No. 1012 at 19–20. The Court considers each argument in turn, though only
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`the fourth—regarding the Microsoft determination—is new. See Docket No. 798 at 34–37.
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`Page 10 of 18
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`Case 6:12-cv-00855-RWS Document 1037 Filed 01/15/21 Page 11 of 18 PageID #: 69059
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`1.
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`Mr. Weinstein’s Testimony
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`Apple asks the Court to grant a new trial because Mr. Weinstein’s testimony should have
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`been excluded. Docket No. 1012 at 20. As discussed repeatedly and at great length in this and
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`numerous prior orders, Mr. Weinstein’s methodology withstands Apple’s Daubert challenge. The
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`reduced basis for liability does not impact the Court’s prior analysis. Apple is not entitled to a
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`new trial on this basis.
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`2.
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`The Exclusion of Patent Office Proceedings
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`Apple contends that it is entitled to a new trial because the Court excluded evidence from
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`parallel PTO proceedings. Docket No. 1012 at 20. Apple suggests that the fact that the PTO has
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`issued final written decisions finding each claim unpatentable over the prior art is relevant to
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`damages. Id. at 20–22. Apple made the same argument in 2018, and the Court rejected it.
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`The Court remains unpersuaded that exclusion of the PTO proceedings warrants a new
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`trial. See Docket No. 798 at 36. Now, as then, VirnetX’s appeals of those proceedings are ongoing,
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`and none of the asserted claims has been cancelled. Apple could, and did, introduce evidence that
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`the claimed invention “has no utility and advantages over old modes or devices.” Docket No. 1012
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`at 21; see also Docket No. 798 at 37. Evidence of the PTO proceedings is only alternative evidence
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`potentially relevant to Georgia-Pacific factors 9 and 10, and it is by far the most prejudicial. See
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`FED. R. EVID. 403. Apple is not entitled to a new trial on this basis.
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`3.
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`EMVR and Hypothetical Negotiation Instructions
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`Apple asks the Court for a new trial based on its exclusion of Apple’s proposed EMVR
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`instruction and based upon the formulation of its hypothetical negotiation instruction. Docket No.
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`1012 at 22–25. The Court gave the same instructions to the jury in 2018 and rejected Apple’s
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`subsequent challenge based on the same arguments it advances here. See Docket No. 798 at 34–
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`Case 6:12-cv-00855-RWS Document 1037 Filed 01/15/21 Page 12 of 18 PageID #: 69060
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`35. As the Court concluded then and above, Mr. Weinstein’s testimony did not implicate the entire
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`market value rule, so instructing the jury on the rule would have been inappropriate. Indeed, as in
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`the ’417 case, “[t]hough the prices of Apple’s devices were never presented to the jury, the Court
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`instructed the jury, out of an abundance of caution, not to rely on the full price of any Apple
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`product.” ’417 action, Docket No. 1079; see also Docket No. 976 (jury instructions) at 21
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`(“VirnetX has relied on license agreements in which royalties were based on a percentage of the
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`entire price of the licensed end-products. But in determining a reasonable royalty, you must not
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`rely on the overall price of Apple’s accused products at issue in this case.”). The Court presumes
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`that the jury followed this instruction. See Francis v. Franklin, 471 U.S. 307, 324 n.9 (1985).
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`Again, “[f]urther instructions on the precise contours of the entire market value rule may have led
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`the jury to mistakenly believe that it could apply the rule despite the fact that the record did not
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`support the rule’s applicability.” ’417 action, Docket No. 1079 at 28.
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`Apple’s challenge to the hypothetical negotiation instruction is (at least) its third across the
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`’417 and ’855 actions. The Court provided the same instruction in 2018 and in the ’417 retrial.
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`As in each previous instance, the instruction properly conveyed to the jury that the reasonable
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`royalty should reflect the fair market value of the technology. Apple still has not identified any
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`meaningful difference between the Court’s instruction and Federal Circuit case law. See Lucent
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`Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009) (explaining that, in analyzing
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`the hypothetical negotiation, the Court must ask, “Had the Infringer not infringed, what would the
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`Patent Holder have made?” and that “the hypothetical negotiation or the ‘willing licensor-willing
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`licensee’ approach[] attempts to ascertain the royalty upon which the parties would have agreed
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`had they successfully negotiated an agreement just before infringement began”) (internal citations
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`omitted). Accordingly, Apple is not entitled to a new trial on this basis.
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`Page 12 of 18
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`Case 6:12-cv-00855-RWS Document 1037 Filed 01/15/21 Page 13 of 18 PageID #: 69061
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`4.
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`The Exclusion of the Microsoft Determination
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`Apple next contends that it was deprived of a fair trial because the jury heard the
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`complicated history of this case but was not informed of the prior infringement determination in
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`VirnetX’s dispute with Microsoft. Docket No. 1012 at 25. Apple submits that the exclusion of
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`the Microsoft determination allowed VirnetX to draw false distinctions between its hypothetical
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`negotiation with Apple and the circumstances surrounding the Microsoft license. Id. at 25–27.
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`Apple acknowledges, as it must, that the Microsoft determination was the subject of an
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`agreed motion in limine. Docket No. 1020 at 14. It contends, however, that VirnetX opened the
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`door to its introduction by claiming that Apple would “ ‘come to the [hypothetical] negotiation in
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`a worse position’ than VirnetX’s other licensees.” Id. at 14–15 (citing 10/27/20 AM Tr. at 314:6–
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`12; 10/27/20 AM Tr. at 300:4–17; 10/30/20 PM Tr. at 1244:6–1245:17). Apple made this same
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`argument at trial, and the Court rejected it. 10/28/20 AM Tr. at 536:3–6 (“I don’t think the door
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`has been opened wide enough here, particularly given where Mr. Caldwell’s comments fell in his
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`opening.”). Apple has not articulated any reason why that determination was incorrect or why the
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`Court should reconsider it and order a new damages trial.
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`Nor is VirnetX’s claim counter-factual, as Apple contends. See Docket No. 1012 at 26.
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`Microsoft came to the 2010 negotiation an adjudged infringer, but that finding was subject to an
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`appeal that Microsoft forewent in exchange for a settlement. Microsoft continued to contest both
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`infringement and validity. PX409 at VX00088621. Apple, on the other hand, had suffered defeat
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`both in district court and at the Federal Circuit. It therefore could not contest either infringement
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`or validity. VirnetX was not out of bounds when it implied to the jury that Apple was in a worse
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`position in 2013 than Microsoft in 2010, and it did not open the door to the Microsoft determination
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`in doing so. Apple is not entitled to a new trial on this basis.
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`Page 13 of 18
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`Case 6:12-cv-00855-RWS Document 1037 Filed 01/15/21 Page 14 of 18 PageID #: 69062
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`5.
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`Great Weight of the Evidence
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`Apple finally argues that it is entitled to a new trial because the damages award is excessive
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`and against the weight of the evidence. Docket No. 1012 at 27–29. Apple reasons that VirnetX
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`improperly asked the jury to “punish” Apple for its previous infringement and that Mr. Weinstein’s
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`damages methodology is faulty. See id. The Court has discussed Mr. Weinstein’s methodology
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`repeatedly and at length and rejects Apple’s arguments in that regard for the reasons previously
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`discussed.
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`Apple argues that, during closing arguments, “VirnetX suggested that Apple should get a
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`worse deal than every other licensee because Apple previously infringed.” Id. at 27 (citing
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`10/30/20 PM Tr. at 1244:13–1245:17, 1253:3–7, 1283:11–1284:8.). Apple fails to articulate,
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`however, how any of the comments it cites suggest that Apple should be punished for its previous
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`infringement. Id. In support, Apple cites Gilster v. Primebank, 747 F.3d 1007, 1011 (8th Cir.
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`2014). Apple cited the same case in 2018. But again, the remarks in this case are a far cry from
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`those at issue in Gilster. There, the Eighth Circuit reversed a district court’s denial of a new trial
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`motion when, during closing argument in a sexual harassment case, Plaintiff’s counsel referred “to
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`an experience in her own life . . . ‘plainly calculated to arouse the jury’s sympathy’ . . . [and] ended
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`the argument by ‘giving’ the jury the ‘power and the responsibility for correcting injustices.’ ” 747
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`F.3d at 1011. Specifically, the Eighth Circuit noted that “improper vouching permeated counsel’s
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`rebuttal argument.” Id. These circumstances are not present here, and the Court declines to grant
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`a new trial based on VirnetX’s closing argument.
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`* * *
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`Having considered each of Apple’s arguments in its motion for judgment as a matter of
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`law and for a new trial, the Court DENIES Apple’s motion.
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`Page 14 of 18
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`Case 6:12-cv-00855-RWS Document 1037 Filed 01/15/21 Page 15 of 18 PageID #: 69063
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`II.
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`VirnetX’s Motion for Entry of Judgment and Equitable and Statutory Relief (Docket
`No. 1013)
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`VirnetX seeks (1) costs; (2) supplemental damages; (3) an ongoing (or sunset) royalty; (4)
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`pre-judgment interest; and (5) post-judgment interest. The Court addresses each request in turn.
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`A.
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`Costs
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`VirnetX is the prevailing party and is AWARDED costs pursuant to Rule 54(d) of the
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`Federal Rules of Civil Procedure and 28 U.S.C. § 1920. The Court declines Apple’s invitation to
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`police, before receiving the bill of costs, which costs are and are not warranted.
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`B.
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`Supplemental Damages
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`VirnetX requests supplemental damages at the jury’s royalty rate to account for units not
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`included in the jury verdict. Docket No. 1013 at 6–8. Apple, as it did in 2018, requests that the
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`Court stay any accounting of these units until the resolution of all appeals in this case and the PTO
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`proceedings. Docket No. 1017 at 7. According to Apple, the appeals could moot damages awards
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`in this action. Id.
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`Because Apple does not oppose VirnetX’s request for supplemental damages at the jury’s
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`royalty rate, the Court GRANTS VirnetX’s motion for supplemental damages. As in 2018, a stay
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`of accounting is not warranted in this case. Apple is directed to provide VirnetX an accounting of
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`post-verdict, pre-judgment infringing units within thirty (30) days.
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`C.
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`Ongoing Royalty
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`VirnetX asks the Court to award an ongoing royalty at the jury’s rate, as it did in 2018.
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`Docket No. 1013 at 8. Apple asks the Court to deny an ongoing royalty or award a royalty of no
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`more than $0.19 per unit, making the same arguments as it did in its motion for JMOL and for a
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`new trial, which the Court has already rejected. Docket No. 1017 at 8–10.
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`Page 15 of 18
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