That might not sound like much of a business model, but remember, in the world of technology, intellectual property is everything.
"The potential upside is huge – not because of the license fees the company stands to collect - but for another reason - pending patent infringement lawsuits that it could win. "That's where the big money is," said Cramer.
VirnetX is going after Apple in court. Back on November 6th, a Federal jury in Texas ruled in favor of VirtnetX and ordered Apple to pay them 368 million for past patent infringement.
Next week, on December 20th, we'll get the post-trial judgment from a judge that could either increase or decrease the damages and we'll also get more details on the payment from Apple, like whether they'll sign a licensing agreement for future sales.
In March the company is scheduled to go to trial against Cisco, Avaya, and Siemens. Ordinarily Cramer wouldn't bet on this sort of thing, but VirnetX has racked up an impressive track record in litigation against other big players, so he thinks the smart money is on them winning.
However, Cramer also noted, "If VirnetX loses these cases, the stock will get crushed. That means this is basically reasoned gambling."