Burford jumps 10% on Apple's $5.7 billion patent loss; the market is pricing its $1.4 billion share at a fraction
A San Diego jury found Apple's Taptic Engine infringed two Taction patents. Burford, which financed the case, says its cut would be $1.4 billion if paid as is, and then spends most of its statement explaining why it probably won't be.
Shares of litigation funder Burford Capital rose 9.6% to $3.99 on Monday afternoon after the company confirmed it has a financial stake in the $5.7 billion jury verdict against Apple. Apple slipped 0.4% to $339.80, according to Nasdaq data.
A federal jury in the Southern District of California found on Friday that Apple's Taptic Engine, the vibration motor in iPhones and Apple Watches, infringed two haptics patents held by Taction Technology, Yahoo Finance reported. The jury did not find the infringement willful. Apple said it "strongly disagree[s]" with the verdict and will appeal.
What Burford actually said
In a statement on Monday, Burford said that if the verdict were paid as is, its entitlement would be $1.4 billion, "split roughly equally" between its own balance sheet and its investment funds. That puts about $700 million on Burford's own books in the best case.
The rest of the release is a list of reasons not to count on that. Burford said the amount is "likely to be altered" in post-trial or appeal proceedings, that Apple is expected to ask the judge to set the verdict aside, and that "very few large patent verdicts survive the post-verdict process intact." It added that it could recover "substantially less," or in some cases suffer a total loss.
The number behind the number
Burford's stock market value was about $873 million at $3.99 a share, according to Nasdaq. Measured against that, a best-case $700 million balance-sheet share is roughly 80% of the whole company. The market's reaction was much smaller. Monday's 35-cent gain added about $77 million of market value, by our calculation from the Nasdaq figures, or roughly 11 cents for every dollar of Burford's best-case share.
That gap is the market agreeing with Burford's own caution. It is also a reminder of where the stock has been: it is trading far below its 52-week high of $12.35, so Monday's jump barely registers on a one-year chart.
For Apple, the verdict is small against a market value of about $4.96 trillion, around 0.1%. Apple's 0.4% dip on Monday was smaller than the Nasdaq Composite's decline of about 0.6% at the time, according to Yahoo Finance.
How long this takes
Taction filed suit in 2021. A federal judge dismissed the case in 2023, and the U.S. Court of Appeals for the Federal Circuit revived it, according to Yahoo Finance, which cited Bloomberg Law. The patents at issue are U.S. Nos. 10,659,885 and 10,820,117. Any appeal of Friday's verdict would go back to the same Federal Circuit, which Burford itself described as applying "significant appellate scrutiny of large verdicts."
For anyone who owns a patent and is weighing outside funding to enforce it, the timeline is the lesson: more than five years from filing to verdict, and the money is still not in hand.
What traders are watching
- Apple's post-trial motion asking the court to set aside the verdict, and the judge's ruling on it.
- Whether Burford discloses anything further. It said it may not be able to comment on any settlement talks until they conclude.
- Any settlement, which Burford said could come in "considerably less" than the verdict.
Sources: Burford Capital; Yahoo Finance; Seeking Alpha; Nasdaq market data. This is market information, not investment advice.
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