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VirnetX (NYSEMKT:VHC) has been in the news lately for its lawsuits with Apple (NASDAQ:AAPL) and Cisco (NASDAQ:CSCO) regarding patent infringement; although I believe they have a secure future after they leave the courtrooms smiling. One lesser known area in the realm of VirnetX is its Secure Domain Name Initiative. This is one more reason to be invested in VirnetX for the long term.

Overview of Secure Domain Names

Secure Domain names are key to securing the next wave of wireless networks, a tidal wave that VirnetX is going to ride well into the future. These secure domain names are important, because they are integral to communicating securely in the next form of wireless communication. This new form of wireless transference is 4G LTE-Advanced, with companies such as AT&T (NYSE:T) expected to roll it out in late 2013 and Verizon Wireless (NYSE:VZ) in 2014. Secure domain names are required to establish secure communications between devices. I believe Apple used the idea of secure domain names to create secure communications on Imessage and Facetime using their creation of Apple IDs. Information regarding VirnetX's win against Apple can be viewed in my first article. Kendall Larsen, Chairman, President and CEO of VirnetX:

Secure domain names are an integral part of securing the next generation 4G/LTE wireless networks. All 4G mobile devices will require their own individual secure domain name and become part of a secure domain name registry.

Impact On The Market

On VirnetX's website they state that there will be 4 billion mobile devices by 2014, and Cisco has stated online that there will be over 8 billion mobile devices by the year 2016. All of these devices are going to need a secure domain name to be safe and secure in the new wave of communication.

Solution For The Government

Bloomberg released an article stating that President Obama may be initiating an executive order as soon as next week, February 11, to increase the level of cyber security for the nation's infrastructure. This cyber security increase would focus on infrastructure related operations such as water, public transportation, air traffic control, and networks that deliver our gas, power, and oil in addition to other areas. These vital components to our nation are open to hackers and intruders, as shown by recent hacking of the Federal Reserve, where information on 4,000 personal records were stolen. President Barack Obama said:

cyber threat is one of the most serious economic and national security challenges we face as a nation" and that "America's economic prosperity in the 21st century will depend on cybersecurity.

President Obama is taking a firm stance on protecting the nation's infrastructure and communication from cyber attacks and hackers. Kendall Larson has perfectly articulated how VirnetX can provide the technology the government is searching for to achieve this greater level of cyber security. In addition, the cyber security bill employs the use of secure domain names, a service VirnetX provides. Larsen said:

The Cybersecurity Act calls for the use of a secure domain name system, which is what VirnetX's technology provides. VirnetX and our SDNI partners can deliver what the government is mandating for a secure Internet using secure domain names. Existing domain names will be able to move to a new secure domain name and devices will have their own secure domain name so owners and operators can transmit data securely and in real time - safe from hackers and thieves.

How VirnetX Will Profit From Their Secure Domain Name Initiative

Secure Domain Name Services is projected to contribute the largest share of profits for VirnetX as a company, when compared to the company's other areas of business. The extremely comprehensive and informative white paper by Justin Moreno states that VirnetX will receive $0.20 per monthly device subscription, equating to a total of $3,812,718,000 for VirnetX through 2017. This in turn creates $65.18 in shareholder value, separate from VirnetX's 4G licensing, litigation, Apple's damage award and royalties on IOS products, current cash on its balance sheet and the rollout of Gabriel connection technology. Moreover VirnetX is a business, and like one, they are going to charge the government the same upfront payments and licensing fees they would charge any other licensee.

Conclusion

In the future, there will be increased adoption of VirnetX's secure sip model in 4G LTE-A. The different standards in this new wave of 4G explains how various devices connect effectively, which VirnetX's patents' claims cover at the basic security level. This new wave is expected to roll out in late 2013. Victories in court against Apple and Microsoft have demonstrated that VirnetX owns the secure sip model. One note is that VirnetX did not create sip, their engineers created a unique way of securing sip that has been adopted and built into 3GPP release 10 standards. VirnetX's secure domain name initiative is the backbone of securing real time communications in the future. This future is the rollout of lightning-fast 4G LTE-Advanced. Having superfast speed is a sizzling attribute for future devices, although security will reign paramount with VirnetX waiting to profit.

Disclaimer: Always do your own comprehensive research or seek professional advice to make sure an investment is right for you before executing one. Justin Moreno's white paper on VHC can be accessed at www.vhcreport.com

Source: Another Reason Why You Should Be Invested In VirnetX