SecProbe.io

October 2, 2012

Via E-mial
Mr. Kendall Larsen
President & Chief Executive Officer
VirnetX Holding Corporation
308 Dorla Court
Suite 206
Zephyr Cove, NV 89448

Re: VirnetX Holding Corporation .
 Form 10-K for the Fiscal Year Ended December 31, 201 1
Filed February 2 9, 2012
Form 10 -Q for the Quarter Ended June 30, 2012
Filed August 9, 2012
File No. 001-33852

Dear Mr. Larsen:

We have reviewed your letter dated August 30, 2012 in connection with the above -
referenced filing s and have the following comment.  In our comment , we may ask you to provide
us with information so we may better understand your disclosure.

Please respond to this letter within t en business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our comment applies to your facts and circumstances or do not
believe an amendment is a ppropriate, please tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to this comment, we may have  additional comments.   Unless otherwise noted , where
prior comments are referred to the y refer to our letter dated August 13, 2012 .

Form 10 -Q for the Fiscal Quarter ending June 30, 2012

Notes to the Financial Statements

Note 9.   Litigation, page 9

1. We note from your response to our prior comment 1 that the one -time payments r eceived
in your Patent License Agreements did not include a damages judgment.  Considering the
Agreements were entered into in settlement of existing patent infringement litigation in
which you agreed to dismiss the pending litigation, tell us what conside ration you gave to

Kendall Larsen
VirnetX Holding Corporation
October 2, 2012
Page 2

 allocating a portion of the proceeds to non -license royalty revenues such as consideration
for settling the dispute, interest or other income or expense reimbursement, etc.

2. Please explain further how you considered the allocation guida nce of ASC 605 -25-25, by
analogy, with regards to disaggregating any allocation to separate elements among the se
Agreements.

3. Please describe, in detail, how you determined the amount of consideration to be paid for
past royalties under each of these Agr eements.  In your response, please clarify whether
each Agreement covers the same technology and if so, explain further why the royalty
rates differ and how such rates were derived under each Agreement.  In this regard, tell us
what impact any exclusive or  non-exclusive license provisions had on your determination
of royalty rates among the Agreements.  In addition, tell us whether you were able to
determine the actual amount of usage based on prior sales by each licensee and how such
usage factored into th e one -time payment received upon settlement.  Also, explain further
why you believe revenue classification is appropriate for the entire amount of such
payments.

4. Tell us how you determined the future royalty rates for each of these Agreements.
Explain further why the rates differ amongst the Agreements and why the royalty rates
charged for past usage are lower than those charged for future usage in two of your
Agreements.  Also, tell us how these royalty rates compare to the rates charged under
arrangem ents that were not negotiated as part of pending litigation as well as to your
established licensing policies.

5. Please provide us with copies of each of these Agreements and a summary of the terms,
conditions and nature of any exclusivity conditions.

You may contact Melissa Kindelan , Staff Accountant at (202) 551 -3564 if you have
questions regarding comments on the financial statements and related matters.  Please contact me
at (202) 551 -3499 with any other questions.

Sincerely,

 /s/  Kathleen Collins

Kathleen Collins
Accounting Branch Chief

cc:   Via E -mail
Brad Finkelstein
Wilson Sonsini Goodrich & Rosati