Shares of VirnetX Holding Corporation (NYSEMKT:VHC) rose as much as 17.1% early Monday, but later plunged to finish the day down 7.1%, after the company announced a big legal win in its ongoing patent-infringement case against Apple (NASDAQ:AAPL).
More specifically, VirnetX announced today that on Sept. 29, the U.S. District Court for the Eastern District of Texas, Tyler Division, entered a "final judgment" of more than $439.7 million in favor of the patent-litigation and software-technology specialist.
VirnetX CEO Kendall Larsen elaborated:
We are elated with the Court's Final Judgement of $439 million in that not only did it affirm the jury's verdict of $1.20 per infringing iPhone, iPad, and Mac Product, but also added for willful infringement, interest, and attorney fees. This is the third time a jury has ruled in our favor against Apple. This Final Judgement amount is large because sales of Apple's infringing products are large. The cost of our security technology in infringing devices has been apportioned and is less than a quarter of one percent of the device's cost. We believe this established per device rate for security is very reasonable and will greatly assist us with our domestic and global licensing efforts.
So why, then, did VirnetX stock ultimately plunge on the day? Look no further than Apple's response; this afternoon, the Cupertino-based tech giant promptly stated that it intends to appeal the ruling.
Of course, Apple's impending appeal shouldn't be surprising. VirnetX noted in its press release today that the final judgment is "subject to appeal stemming from new issues unresolved in the Apple I case" -- a reference to the same District Court's decision in August 2016 to split the previously consolidated cases into two separate cases, dubbed "Apple I" and "Apple II." And as Larsen elaborated, this isn't the first time VirnetX has enjoyed a favorable decision in the case, which it initially filed against Apple more than seven years ago. So while this is certainly a big step in the right direction for VirnetX, there's still plenty of work to do before it can turn its legal wins into real money.