VirnetX Shares Plummet As Appeals Court Sides With Apple

VirnetX VHC shares plummeted as much as 50% on Friday following a report the company's damage award against Apple AAPL has been vacated upon appeal.

What to Know About VirnetX

VirnetX is an internet security software and technology that had been expecting a huge payout from Apple after a U.S. appeals court revived aspects of a patent for secure communications and previously rejected Apple’s efforts to toss a related infringement verdict.

On Oct. 8, the Federal Circuit had denied several significant motions filed by Apple relating to the case.

Why VirnetX Stock Plummeted

On Friday, Reuters reported the U.S. appeals court has set aside a jury’s calculation that Apple should pay $503 million for infringing on patents owned by VirnetX.

The U.S. Court of Appeals for the Federal Circuit said a lower court should consider whether it was appropriate to recalculate damages without holding a new trial.

In a partial victory for VirnetX, the U.S. Court of Appeals for the Federal Circuit left in place a Texas jury’s finding that iPhones infringed two of VirnetX patents relating to its secure communications technology. But the court has reversed the jury’s infringement finding on two other patents.

Reuters said the Texas judge must consider whether to hold a new damages-only trial or recalculate damages without holding one, the appeals court said.

VirnetX's stock traded lower by 25% to $4.34 per share at time of publication.