Shares of communications software company VirnetX (VHC), which is suing Apple (AAPL) for patent infringement, were down $2.21, or 6.3%, at $32.72, before being halted on Nasdaq a little after 2 pm, Eastern time, pending a news announcement.
It turns out that news is that a post-trial motion was held in the U.S. District Court for the Eastern District of Texas, Tyler Division, in VirnetX’s suit against Apple, the company said. The company says the judge in the case has ordered Apple to provide sales data for various products, including its iPhone 5, by January 15th.
VirnetX announced November 9th it had filed suit based on four patents it holds, saying Apple infringed its technology for so-called virtual privatenetwork connections. That sued claimed infringement by Apple’s iPhone 5, iPod Touch 5th Generation, iPad 4th Generation, iPad mini, and the latest Macintosh computers.
Just days before the latest suit, on November 6th, a jury in the same court awarded VirnetX $368 million in a previous patent suit against Apple, after finding it infringed four patents, though that judgment did not cover the products mentioned in VirnetX’s second suit.
VHC shares have now resumed trading and have recovered from the lowest levels of the session, though they’re still down $1.18, or 3.4%, at $33.75.
VirnetX’s potential royalty stream from Apple has been a source of enthusiasm for some bulls on the stock. For example, Cowen & Co.’s Matthew Hoffman, who has an Outperform rating on the shares, wrote on November 28th that “We expect the trial judge to at least award VHC an ongoing royalty for still-infringing products.”
“We continue to value VHC’s patents at $2.7-$3.5B (midpoint $3.1B) and see the potential for shares to appreciate ~70% relative to the market over the next 12 months.”
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