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An Innovation Jason Bourne Would Love

By Marshall Phelps You know that scene in the 2002 movie The Bourne Identity, when Jason Bourne (Matt Damon) dispatches a CIA assassin sent to kill him at his French farmhouse hideout — and then uses the guy’s phone to make a zero-click encrypted phone call to CIA headquarters in Langley?

In truth, the technology to enable agents in the field to make such calls didn’t even exist when the movie was made. Back then, real-time communications between agents in the field and headquarters were very cumbersome, requiring 150-200 keystrokes and a lot of IT handshaking on both ends. For an agent in a dangerous environment like Afghanistan (or even the French countryside), such an unwieldy communications system posed significant operational and personal security problems.

So even as the script for The Bourne Identity was being completed in 1999, the CIA’s venture capital arm, In-Q-Tel, was launching a program with the $4 billion defense contractor SAIC (Science Applications International Corporation) to work on national security communications challenges. Out of this project, code named “Net Eraser,” came the world’s first zero-click secure encrypted communications technology of the sort used in today’s iPhones and other devices.

But the journey of this “Jason Bourne” tech from CIA skunkworks to commercial product is a tale all unto itself. It involves a gutsy group of SAIC scientists willing to forego job security for the very uncertain fate of a startup, the willful infringement of their patented technology by the world’s richest company, Apple, and more recently, a February 3, 2016 federal court verdict ordering Apple to pay those scientists and their startup, VirnetX, a whopping $625 million in damages.

Later this month, on May 25, the judge will hear post-trial motions and hopefully soon thereafter issue his final order in the case. After three separate federal courts — that’s right, three! — have repeatedly upheld VirnetX’s patents as valid and infringed by Apple, this hearing may finally bring the whole saga to a close. But before it does, let’s take a look back to the beginning of it all.

When it developed the zero-click encryption tech for the CIA, SAIC realized it had a potential home-run product for securing the fast-growing Internet. However, as one of America’s largest defense contractors, SAIC didn’t actually make or sell products.

So to commercialize this breakthrough technology, SAIC decided to spin it out into a separate venture in exchange for an equity share in the new startup, to be called VirnetX. Spinning out new ventures from government-backed defense research is commonplace in the U.S., and has led to the formation of Qualcomm, Verisign, and other companies in the high tech industry. As a business model, it’s been called “as American as apple pie.”

But VirnetX was being launched in the wake of the early 2000s tech industry collapse — not a great time to start a new company. So SAIC knew it needed a veteran security executive at its helm. They found him in Kendall Larsen, a former Senior Vice President of the Security Products Division of Phoenix Technologies and Senior VP at RSA Security, Inc.

With Larsen as CEO, the original SAIC scientist-inventors of the technology also agreed (albeit a bit nervously) to risk their careers and join the new venture. And these guys were hardly your typical 20-something Silicon Valley coders, as you can tell from the following bios.

The chief technology officer (Edmund Munger) was an assistant vice president at SAIC and chief architect of the FBI’s Counterterrorism Data Warehouse Prototype. The chief scientist (Dr. Robert Short) was also an SAIC assistant vice president with a Ph.D. in electrical engineering and a master’s in mathematics. The head of R&D (Dr. Victor Larsen) had worked at SAIC on advanced prototypes for secure communications. And the senior software developer (Mike Williamson) had worked on various national defense and law enforcement projects.

Where does Apple come in to all this? Well, you know those blue (not green) text bubbles you see when you use Apple’s iMessage? That shows you are using a messaging system secured by VirnetX’s “Jason Bourne” encryption technology. VirnetX invented and patented it.

So to protect their patented innovations, the scientists were forced to litigate. As noted previously, three federal courts ruled that Apple infringed VirnetX’s patents when it used their technology in its iMessage, Facetime, and VPN on Demand services — and in the case of Facetime and VPN on Demand, did so willfully!

But the weirdest twist in this case is that Apple’s friends in the media keep referring to VirnetX as a “patent troll,” which is just plain silly. I mean, isn’t the pejorative “patent troll” supposed to be reserved for outfits run by thieving lawyers, not scientists? For firms with no genuine technological advance to offer? And for companies that don’t actually make or sell any products?

So why call VirnetX a troll? The firm is run by top PhD scientists who made a major technological breakthrough in secure encrypted communications and then commercialized it into a real product — the Gabriel Collaboration Suite of apps that enable secure messaging, secure voice and video calling, secure mail, and secure file sharing between any device using any operating system — all encrypted.

You can download the Gabriel Collaboration Suite from Apple’s App Store, Google’s Play Store, or from VirnetX also licenses its technology to companies like Microsoft, Aastra, Mitel, NEC, Siemens, and Avaya.

Will the post-trial hearing on May 25 finally bring this long case to a close? I hope so, because then VirnetX can get back to continually improving its “Jason Bourne” tech so that citizens can better resist the growing attempts by hackers and by government to invade their privacy.

And Apple, of course, can get back to making great devices.

Whatever else, the VirnetX saga shows how the road from innovation to commercial product is often long and tortuous. Innovators need to be made of sterner stuff, indeed.

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