Apple Redesigns Facetime Over Patent Ruling, Damages Service Quality
posted Sunday Sep 1, 2013 by Scott Ertz
Apple's $368 million patent loss to VirnetX and subsequent lost ruling challenge has cost Apple more than just some money. As part of the battle, Apple has redesigned the backend of their Facetime system, resulting in significant quality loss.
As explained by an engineer during the trial, only about 5% of all Facetime calls went through relay servers: almost everyone communicated peer-to-peer. That direct communication was instrumental in the patent loss, so a change was made to route ALL calls through relays. Engineer Patrick Gates testified that making the change would be trivial in result, but would be expensive to implement, trying to minimalize the effects.
Unfortunately, it turns out that the estimated $3.6 million total cost has resulted in an actual cost of $2.4 million per month. All of that money, and it also turns out that Gates was wrong about the effects of the change as well. As of August 15, Apple has received "over half a million calls" complaining that the service is no longer working properly.
With that knowledge, VirnetX has the ammunition to fight for higher royalties based on the value of their patents, being able to prove that their technology is essential and nearly impossible to work around. As of now, VirnetX is looking for an additional $700 million in ongoing use royalties.
In addition to this "work-around" Apple is also working on a work-around for their iOS VPN-on-demand service, which is also material to VirnetX patent lawsuits. My guess is that one won't go any better than this.
