{"id":3386,"date":"2013-09-02T12:30:18","date_gmt":"2013-09-02T16:30:18","guid":{"rendered":"http:\/\/blog.nccomputertech.com\/?p=3386"},"modified":"2013-09-02T12:30:18","modified_gmt":"2013-09-02T16:30:18","slug":"report-after-patent-loss-apple-tweaks-facetime-and-logs-500000-complaints","status":"publish","type":"post","link":"https:\/\/nccomputertech.com\/techtalk\/2013\/09\/02\/report-after-patent-loss-apple-tweaks-facetime-and-logs-500000-complaints\/","title":{"rendered":"Report: After patent loss, Apple tweaks FaceTime\u2014and logs 500,000 complaints"},"content":{"rendered":"

\"\"<\/a><\/p>\n

The 2012 patent trial that grabbed the most headlines was Apple’s $1 billion win (since reduced) against Samsung. But Apple also suffered a major patent setback of its own last year when a patent-holding company called VirnetX won a $368 million verdict against the tech giant.
\nThe consequences of Apple’s loss are now starting to become clear. This month, testimony in a court hearing showed that not only is Apple facing royalty payments that could cost it many millions more, but it has already made changes to one of its premiere products, FaceTime\u2014changes that reportedly have degraded the service’s quality.
\nApple was found to have infringed four VirnetX patents that cover various aspects of the FaceTime video chat system. VirnetX wasn’t able to get an injunction blocking the use of FaceTime altogether, but the judge overseeing the case has been receptive to the argument that Apple should pay an ongoing royalty for infringement.
\nNow, reports have emerged from a key hearing earlier this month indicating that Apple is logging vast numbers of complaints about FaceTime after a re-design of the service’s backend architecture. It’s important to note that these reports have emerged mainly from discussion groups of VirnetX investors; no media organizations have published reports from the royalty hearing, which occurred on August 15. The documents related to the royalty litigation are almost entirely sealed.
\nBearing those caveats in mind, Ars spoke with Jeff Lease, a VirnetX investor. Lease runs his own lawn sprinkler installation business and owns VirnetX stock, which trades as VHC on the New York Stock Exchange. Lease has a clear stake in this dispute; the better VirnetX does in court, the better its stock may do. But he has impressively detailed knowledge of the case, having shown up both to last year’s jury trial and post-trial hearings. Lease’s statements to me were based off his extensive note-taking in court. I have no reason not to believe that his statements are accurate, but at this time his statements are the only source for this report.
\nNeither Apple nor the attorney who represented Apple at the August hearing responded to requests for comment. A VirnetX lawyer also did not respond to a request for comment.
\nApple: We\u2019re not infringing, but we re-designed anyhow
\nBefore the VirnetX case, nearly all FaceTime calls were done through a system of direct communication. Essentially, Apple would verify that both parties had valid FaceTime accounts and then allow their two devices to speak directly to each other over the Internet, without any intermediary or “relay” servers. However, a small number of calls\u20145 to 10 percent, according to an Apple engineer who testified at trial\u2014were routed through “relay servers.”
\nBoth sides in the litigation admit that if Apple routes its FaceTime calls through relay servers, it will avoid infringing the VirnetX patents. Once Apple was found to be infringing\u2014and realized it could end up paying an ongoing royalty for using FaceTime\u2014the company redesigned the system so that all FaceTime calls would rely on relay servers. Lease believes the switch happened in April.
\n“The judge kept telling them, you need to consider yourself ‘adjudicated infringers,'” said Lease. “Apple said, we don’t think we’re infringing, but we switched to 100 percent relay servers [anyhow].”
\nHigher costs and more complaints
\nAt trial, Apple engineer Patrick Gates testified about how FaceTime works. He downplayed the impact that changing the system would have on FaceTime quality\u2014presumably to show how unimportant the VirnetX patents were. He estimated the cost of running all FaceTime calls through relay servers at $3.6 million total. As for call quality, he said that it wouldn’t be affected negatively at all\u2014if anything, it might actually improve.
\nBut according to Lease, it has now been revealed that Apple is actually paying $2.4 million per month to run FaceTime calls through relay servers. The payments are mainly to Internet content distribution companies like Akamai, which are transmitting vastly more FaceTime calls.
\nMeanwhile, Apple has handed over its customer service logs from April through mid-August to VirnetX’s attorneys. At the August 15 hearing, a VirnetX lawyer stated that Apple had logged “over half a million calls” complaining about the quality of FaceTime, according to Lease.
\nIf that’s accurate, the data will bolster VirnetX’s arguments that its patents are technologically significant, hard to work around, and deserve a high royalty rate. The judge and lawyers present at the hearing didn’t discuss numbers regarding what a reasonable ongoing royalty might be, but VirnetX is asking for royalty payments of more than $700 million for the ongoing use of FaceTime, according to Lease.
\nIn addition to doing a patent design-around with FaceTime, Apple also announced back in April that it would be doing a similar design-around of its VPN on Demand service for iOS\u2014also to avoid VirnetX patents. However, Apple backtracked on those statements a few weeks later.
\nAs to what the judge in the royalty case might do, Lease said there was no clear indication in the hearing he observed.
\n“He’s hard to read,” said Lease. “I’d hate to play poker against him.”
\nvia Report: After patent loss, Apple tweaks FaceTime\u2014and logs 500,000 complaints | Ars Technica<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

The 2012 patent trial that grabbed the most headlines was Apple’s $1 billion win (since reduced) against Samsung. But Apple […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[2,9,10],"tags":[350,1163],"class_list":["post-3386","post","type-post","status-publish","format-standard","hentry","category-apple","category-software","category-technology","tag-facetime","tag-virnetx"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/papNkV-SC","jetpack-related-posts":[{"id":9516,"url":"https:\/\/nccomputertech.com\/techtalk\/2019\/02\/03\/to-the-woodshed-with-you-this-week-in-tech-704\/","url_meta":{"origin":3386,"position":0},"title":"To the Woodshed With You! – This Week in Tech 704","author":"NCCT","date":"February 3, 2019","format":false,"excerpt":"https:\/\/youtu.be\/14UX3TQ0K3Q FaceTime Flaw, Apple Spanks Facebook and Google, Huawei Suspicions, FBI Wants Your DNA, and more. \u2022 How to Watch the Superbowl Commercials Without All That Annoying Football \u2022 Apple's Not So Horrible Quarterly Earnings \u2022 Facetime Flaw Dulls Apple's Privacy Shine \u2022 Apple Spanks Facebook and Google for Data\u2026","rel":"","context":"In "Apple"","block_context":{"text":"Apple","link":"https:\/\/nccomputertech.com\/techtalk\/category\/apple\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/img.youtube.com\/vi\/14UX3TQ0K3Q\/0.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":6933,"url":"https:\/\/nccomputertech.com\/techtalk\/2014\/11\/21\/google-settles-patent-case-with-microsoft-apple-consortium\/","url_meta":{"origin":3386,"position":1},"title":"Google settles patent case with Microsoft, Apple consortium","author":"NCCT","date":"November 21, 2014","format":false,"excerpt":"Google has agreed to settle a dispute with the Rockstar patent consortium, that includes Microsoft and Apple among its members. The legal dispute was related to patents which were, according to Rockstar, infringed upon by Google\u2019s Android OS. Rockstar acquired numerous patents and intellectual property from Nortel, and used those\u2026","rel":"","context":"In "Apple"","block_context":{"text":"Apple","link":"https:\/\/nccomputertech.com\/techtalk\/category\/apple\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5622,"url":"https:\/\/nccomputertech.com\/techtalk\/2014\/05\/29\/this-week-in-tech-459-plaudits-and-brickbats\/","url_meta":{"origin":3386,"position":2},"title":"This Week in Tech 459: Plaudits and Brickbats","author":"NCCT","date":"May 29, 2014","format":false,"excerpt":"Microsoft announces the Surface Pro 3, rumored Apple-Beats deal delayed, Amazon fights big publishers but hurts authors, Metafilter gets crushed by Google, Google+ generates interactive photo albums with Stories, eBay advises users to change passwords after data breach, what to expect at Apple's WWDC 2014, a big win for patent\u2026","rel":"","context":"In "Technology"","block_context":{"text":"Technology","link":"https:\/\/nccomputertech.com\/techtalk\/category\/technology\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/img.youtube.com\/vi\/UvXEHhzhfhU\/0.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":6106,"url":"https:\/\/nccomputertech.com\/techtalk\/2014\/07\/30\/13-things-os-x-yosemite-beta-testers-need-to-know\/","url_meta":{"origin":3386,"position":3},"title":"13 things OS X Yosemite beta testers need to know","author":"NCCT","date":"July 30, 2014","format":false,"excerpt":"For the first time since the OS X beta test of 2000, Apple is allowing Mac users to test and provide feedback on a prerelease version of OS X. The first 1 million people to sign up for the beta program through Apple\u2019s Web page\u2014which crashed under heavy traffic on\u2026","rel":"","context":"In "Apple"","block_context":{"text":"Apple","link":"https:\/\/nccomputertech.com\/techtalk\/category\/apple\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":9056,"url":"https:\/\/nccomputertech.com\/techtalk\/2016\/11\/08\/this-week-in-tech-587-leaving-the-apple-cult\/","url_meta":{"origin":3386,"position":4},"title":"This Week in Tech 587: Leaving the Apple Cult","author":"NCCT","date":"November 8, 2016","format":false,"excerpt":"https:\/\/www.youtube.com\/watch?feature=player_detailpage&v=W-Re9bJSgjY Days before the US elections, we discuss the preeminence of social media, the difficulty of fact checking, and the loss of trust in the media that has occured this year. Is Apple's recent MacBook announcement an acknowledgement that they are no longer a Macintosh company? Samsung has received 85%\u2026","rel":"","context":"In "Technology"","block_context":{"text":"Technology","link":"https:\/\/nccomputertech.com\/techtalk\/category\/technology\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/img.youtube.com\/vi\/W-Re9bJSgjY\/0.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":9216,"url":"https:\/\/nccomputertech.com\/techtalk\/2017\/07\/31\/this-week-in-tech-625-walking-to-the-bodega\/","url_meta":{"origin":3386,"position":5},"title":"This Week in Tech 625: Walking to the Bodega","author":"NCCT","date":"July 31, 2017","format":false,"excerpt":"https:\/\/youtu.be\/xd-quupIYug Apple pays $506 million and \u20ac1.7 billion for patent infringements. Trump says that Apple will build 3 big plants in the US; Apple declines to comment. Apple kills the iPod Nano and Shuffle. Coders aren't happy about the new spaceship campus. Amazon, Alphabet, and Twitter stocks slide after earning\u2026","rel":"","context":"In "Apple"","block_context":{"text":"Apple","link":"https:\/\/nccomputertech.com\/techtalk\/category\/apple\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/img.youtube.com\/vi\/xd-quupIYug\/0.jpg?resize=350%2C200","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/nccomputertech.com\/techtalk\/wp-json\/wp\/v2\/posts\/3386","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nccomputertech.com\/techtalk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nccomputertech.com\/techtalk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nccomputertech.com\/techtalk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/nccomputertech.com\/techtalk\/wp-json\/wp\/v2\/comments?post=3386"}],"version-history":[{"count":0,"href":"https:\/\/nccomputertech.com\/techtalk\/wp-json\/wp\/v2\/posts\/3386\/revisions"}],"wp:attachment":[{"href":"https:\/\/nccomputertech.com\/techtalk\/wp-json\/wp\/v2\/media?parent=3386"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nccomputertech.com\/techtalk\/wp-json\/wp\/v2\/categories?post=3386"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nccomputertech.com\/techtalk\/wp-json\/wp\/v2\/tags?post=3386"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}