VirnetX Holding Corporation (NYSEMKT:VHC) shares jumped 18.32% to $6.20 on Tuesday and an additional 0.81% to $6.25 after the Supreme Court relaxed requirements on willful infringements. This patent law precedent was created by the US Court of Appeals to set stricter standards in determining whether an infringement was willful.
Now that these requirements have been relaxed, patent holders can find it easier to seek treble damages and monetary compensation on damages. In particular, the decision changes the meaning of a provision in the patent law stating that lower courts can increase the damages up to three times the amount assessed. However it doesn’t set specific guidelines on how these damages can be awarded, leaving it up to the court.
Such a threshold requirement excludes from discretionary punishment many of the most culpable offenders such as the “wanton and malicious” pirate who intentionally infringes another’s patent — with no doubts about its validity or any notion of a defense — for no purpose other than to steal a patentee’s business. The subjective willfulness of a patent infringer, intentional or knowing, may warrant enhanced damages, without regard to whether his infringement was objectively reckless,” explained Chief Justice John Roberts.
Keep in mind that VirnetX Holding Corporation is a company that relies heavily on patent licensing and royalties, along with court damages. It is an Internet security software and technology company with a technology for secure communications, including fourth-generation (4G) long term evolution (LTE) security. Among its security and technology solutions are secure domain name registry and related services.
Earlier in the year VirnetX shares jumped more than 50% after the company was awarded a major patent victory against tech giant Apple. In this court decision, the jury determined that iMessage and FaceTime on Apple devices infringed on VirnetX patents, earning the company $256 million in damages and marking the second victory that it has scored over Apple.
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