Rumours of the legal case regarding patent infringement by Appthority are premature and incorrect, claims its President.
Speaking to IT Security Guru, Domingo Guerra said that reports about the ruling over patent infringement brought by vendor Veracode were not correct, as only the jury verdict had been returned and the judge was due to return to deliver his final judgment in November or later.
He said: “Veracode is trying make it seem the case is over using only the preliminary jury verdict, but there has been no judgment made.
“Further, the jury verdict was split: the jury unanimously agreed that Appthority did not infringe on any of the claims on the Veracode patent and that Appthority infringed on only 2 of the 24 claims on an old patent that Veracode licenses from Rovi (who does not practice the patent).”
Guerra claimed that it was a debugging patent, yet Appthority does not do debugging at all as it looks at application behaviours, not programming errors. “Veracode said that detecting app behaviours like location tracking or access to an address book was the same as detecting programming errors, but that is clearly a stretch,” he said.
“We don’t do debugging, so we do not offer a debugging service nor do we incorporate debugging into our technology. We monitor application behaviour and risk rather than looking for programming errors, and we make tools for administrators and security professionals who want to know what the applications is doing in their enterprise mobile environments.”
Guerra claimed that the patent in question expires in 2016, and he was confident that by the time the trial has been decided and an appeal was brought by either side, it will be well beyond 2016.
Another inaccuracy of the early reports based on the August 22nd ruling was that Appthority would have to pay “an amount that approximates the entirety of Appthority’s revenue to date”, Guerra dismissed this, again saying that no ruling had been made to date, and that the sales numbers discussed in trial were not current sales numbers for Appthority, but sales through a point earlier in their history, before Appthority saw major growth in Enterprise and Government sectors. In any regard, Guerra said that “even if Appthority were to pay damages, it would not adversely impact the Company nor have any impact on its business viability.”
Guerra took issue with the claim that Appthority had “wilfully infringed” upon the patents, saying that was not possible to be found to wilfully infringe a patent by a jury, as that finding requires both a jury and a judge finding to be complete. There has to be the decision of the judge and the jury and only half had been decided.
He said: “Not a lot of patents cases go to trial and the majority settle ahead of the trial. No matter what, either party will appeal as Veracode will want to claim infringement and we know we do not infringe these patents.
“Veracode is doing this as it wants to delay our growth and it is using the legal system to slow us down.”
In response, Veracode CTO Chris Wysopal said that the jury trial was what was most important and that deemed that Appthority had wilfully infringed. In regard to the statement about Veracode deliberately delaying Appthority’s growth, Wysopal said that this is not a case that was “frivolous” at all.
He said: “The jury
gave their most extreme judgement that they wilfully infringed, and I don’t understand that statement at all. This is not frivolous in anyway.”
Looking at the claims of infringement, Wysopal said that this comes down to the wording of the patent. “The technology says it uses static debugging to find programming errors, and the judge gave the definition to the jury and part of the definition is ‘invalid manoeuvres’ and invalid operations that the programme would make,” he said.
“Think about when your contacts work back or when your GPS tracks, these are invalid operations and not done with best interest in mind, and the jury said they think that they are tracking errors, and that is what the jury thought. Appthority don’t think so, but the jury did.”
Dean Breda, legal counsel at Veracode, told IT Security Guru that Veracode’s sole position was to protect its intellectual property and it thought that a resolution could be found through litigation, but there was “no willingness to do that”.
He said: “The jury determined wilful infringement on the patent and Appthority filed a motion to overturn the jury finding and they have to find no basis. It doesn’t mean there is not a decision where we cannot seek enhanced damages.
“The judgement acknowledged in the court filing “what we were awarded functionally was the Appthority revenue base” that has nothing to do with the judge finding wilfulness. If the judge finds it, we will receive a conjunctive relief and platform and opportunity to receive legal fees and triple damages.”
Breda confirmed that the jury awarded 99.8 per cent of the entire corporate revenue of Appthority to date. Asked if they were concerned about Veracode being seen as a bully on an emerging start-up, Breda said: “We are not as big as Microsoft or HP, we are not suing anyone else and prefer to not be in court, but we felt compelled to do this and the diversion of time and lawyers are not cheap.”
Wysopal said that as co-founder of Veracode, when the company started he did a search to make sure it was not infringing on any intellectual property and when it found patent it took a license out with Rovi. “We had to pay them a royalty and we still pay today and that is the patent system and we think it is fair and we abide by it legally,” he said. “It is not because they are small, they did not do what we did and we took our license patent.”
Breda said: “It seems that Appthority are painting a picture that we are making noise and making press. We have not and we did not issue a press release or statement, and everything has been reactive.”
