VirnetX Holding Corp. (VHC), the patent licensing company run by CEO Kendall Larsen, posted a narrower first quarter net loss of $5.86 million on higher revenue and lower expenses.
The Zephyr Cove, Nevada-based company’s first quarter net loss of 11 cents a share compared with a net loss of $6.09 million, or 13 cents a share.
Revenue increased to $392,000 from $250,000. Selling, general and administrative expenses decreased to $5.74 million from $6.86 million, a year ago.
VirnetX had cash and cash equivalent of $13.29 million compared with $18.66 million as of year-end 2014.
The company is currently involved in infringement actions against Apple Corp., Cisco Systems, Aastra and NEC in the U.S. District Court in Tyler, Texas.
A $368 million verdict VirnetX won against Apple was later overturned by the Court of Appeals for the Federal Circuit, though the patents were declared valid.
The appellate court has remanded the case back to the district court, which has now consolidated the case with another case against Apple in the same court.
VirnetX said in a securities filing that the jury trial in this case is scheduled for October 13.
In other news, VirnetX said today that it has hired IPVALUE Management Inc. to assist it in commercializing its portfolio of patents on securing real-time communications over the Internet.
The increased revenue and the hiring of IPVALUE reflects a growing realization among patent monetization companies that they need to re-emphasize their ability to commercialize their patents rather than just be seen as so-called patent trolls.
"There's social pressure from so much bad press over abusive monetizers," said Dex Wheeler, chief analyst for M-CAM, the intellectual property advisory firm in Charlottesville, Virginia.
"For companies like VirnetX there's a lot of pressure to not be seen as a malicious entity."
The American Invents Act of 2011 has really limited the business model, he said.
In addition, "the legal system -- even the Eastern District of Texas -- seems fed up."
"The pressure is on -- to if not commercialize your patents -- to at least pursue more well thought out infringement actions or cases with higher values to make them worthwhile. There's no more the scattershot approach."
Under the multi-year agreement, IPVALUE will originate and assist VirnetX with negotiating transactions related to patent licensing worldwide with respect to agreed third parties.
“The technology innovations giving rise to the VirnetX patent portfolio have tremendous value as secure communications are the fundamental building blocks of today’s mobile, internet connected devices and services,” said Murali Dharan, IPVALUE CEO in a statement.
Dhahran said VirnetX’s intellectual property portfolio includes patents that have been declared essential to 3GPP mobile standards and we look forward to opening discussions with companies that need this technology to be compliant.
"IPVALUE has a proven track record of applying a professional, business resolution oriented approach to licensing marquee intellectual properties like VirnetX’s IP," Dharan said.
Larsen said in the statement that VirnetX was “excited about our relationship with IPVALUE” and believe that working with the IPVALUE team will provide us with the resources to fully commercialize our patent portfolio and maximize the revenue potential of our intellectual property.”
VirnetX’s patent portfolio includes over 107 U.S. and foreign patents with over 75 pending applications. Its portfolio has been licensed by a number of leading technology companies including a recent licensing agreement with Microsoft. VirnetX has submitted a declaration with the 3rd Generation Partnership Project (3GPP) identifying a group of its patents and patent applications that it believes are essential to 19 specifications in the 3GPP LTE, SAE project.
The company emphasizes that its patents are developed in house by a team led by VirnetX Chief Technical Officer and Chief Scientist, Dr. Robert Dunham Short III.
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