Judge Upholds VirnetX Jury Verdict Against Apple For $368M

On Tuesday evening, February 26, 2013, with regards to Case No. 6:10-CV-417 VirnetX (NYSE:VHC), Plaintiff vs. Apple (NASDAQ:AAPL), Defendant a memorandum opinion and order was delivered by Judge Leonard Davis.

The follow key factors were released and confirmed by the company:

1. The jury verdict was upheld for $368,160,000 in favor of VirnetX for infringing on its U.S. Patents which describe a method of transparently creating a virtual private network ("VPN") between a client computer and a target computer. Other patents disclose a secure domain name service. Both products developed by VirnetX establishes secure communications.

2. Apple's request for a new trial as a Matter Of Law under Rule 50(b) was denied.

3. A daily award to VirnetX in the amount of $330,211/day will be paid to VirnetX immediately until everything regarding the royalties are rectified and all details are settled between each of the two parties.

4. The kicker here for investors to know is that:

The parties are ordered to get together between themselves for "royalty" mediation settlement for future use of the technologies in dispute or the judge has stated that he will make a ruling if not reached within 45 days.

In summary: The news as reported on Tuesday, February 26, 2013 by the Eastern District of Texas - Tyler Division was very positive for VirnetX. The judge was very measured. He did not come off as being over the top in his decision. VirnetX did not win an injunction per (Docket No 621), but Judge Davis is making it perfectly clear to the parties that he wants them to work out a royalty settlement through forced mediation. Penalties are now imposed against Apple for any further delays. What the judge is doing here today is not common practice. This ruling, in my opinion, would greatly reduce any chances for an appeals process.

Next steps: Get ready for a positive outcome in the days/weeks to follow with Apple and then prepare for the VirnetX trial against Cisco (CSCO) in March.

Disclosure: I am long VHC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.