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Apple Must Pay $533 Million for Patent Infringement, Judge Says
Rolling Stone ^ | 2-25-2015 | KORY GROW

Posted on 02/25/2015 11:52:36 AM PST by Citizen Zed

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To: IncPen
Smartflash was a USB-connected secure device that logged you into a unique site for purchasing entertainment content; it preceded (even) the iPod by a couple of years.

They never made the device. He made no hardware. It was IF someone made this device, then it could be used this way. They sued on a BUSINESS PLAN PATENT. Read the patents. Smartflash is merely the name of the business, now. . . for something that was NEVER PRODUCED or used. Apple does not use a plug-in device on any of their devices. . . and Smartflash comes in later, in 2010, after Apple develops the iTunes store to work with their Macs, iPod, and later the iPhone and iPads to modify their original patent to INCLUDE what Apple is doing WITHOUT the flash device in the original patent. . . using the same BUSINESS PLAN PATENT!

U.S. Patent Number Date Patent of Application Date Patent Granted
7,334,720 January 19, 2006 February 26, 2008
7,942,317 January 15, 2008 May 17, 2011
8,033,458 November 10, 2010 October 11, 2011
8,061,598 January 24, 2011 November 22, 2011
8,118,221 November 10, 2010 February 21, 2012
8,336,772 August 17, 2011 December 25, 2012
8,794,516 April 3, 2012 August 5, 2014

Using SmartFlash's interpretation of their patents, they invented ApplePay as well. . . and any device, card, or memory device that facilitates secure payments over the Internet IF it happens to pay for digital content, clear or encrypted, because this patent is a BUSINESS PLAN PATENT. . . under the claims they used in suit unless you can show that everyone who buys anything with a Mac, iPhone, or iPad plugs a SmardFlash dongle into their device before they can pay for their purchase.

41 posted on 02/25/2015 5:48:35 PM PST by Swordmaker (This tag line is a Microsoft insult free zone... but if the insults to Mac users contnue...)
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To: fireman15
This is why both Apple and Google spend more money on their legal departments than they do on research. Our system is broken and has been almost from the time of its inception. Unfortunately, it is not any more likely to be fixed than it would be for Obama to balance the budget. There are too many lawyers living off the fruits of the true innovators; they will ensure that no meaningful reform is ever made.p> Your first sentence is total BS, fireman15. Apple and Google do not spend more money on their legal departments than on research. Apple spent under $375 million on legal defense expenses in 2014, which was admittedly very high, however they spend a lot more on Research.

Apple's Research and Development spending in 2014 *
Quarter Ending Amount Invested
March 31, 2014 $ 1.422 Billion
June 30, 2014 $ 1.603 Billion
September 30, 2014 $ 1.686 Billion
December 31, 2014 $ 1.895 Billion
TOTAL INVESTED IN R&D 2014 $ 6.606 Billion
* Source: Apple Inc 10-Qs for 2014

42 posted on 02/25/2015 7:22:04 PM PST by Swordmaker (This tag line is a Microsoft insult free zone... but if the insults to Mac users contnue...)
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To: Dr. Bogus Pachysandra

No, Apple should be paying Virnetx for real world infringing of their patents. Virnetx won the case. They’ve also took to court and received settlements with Microsoft, Avaya, NEC and recently settled again with Microsoft for additional patents having to do with end to end secure communications. What part of ‘Apple guilty of infringement’ is so hard to understand?


43 posted on 02/25/2015 7:25:51 PM PST by SueRae (It isn't over. In God We Trust.)
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To: burghguy
The CAFC threw out the amount solely because they created in that order a new way to calculate damages. The case was remanded for a new trial on the level of damages and whether Facetime also was infringing. Apple was held to be infringing on VHC’s patent on VPN on demand. Apple is a thief, but it will eventually have to pay up. Apple will drag out these proceeding for years in hopes that whoever they are stealing intellectual property from will go bankrupt before they have to pay. By the way, many people believe the new jury award will be higher than the original $368 million because VHC’s patents have be found not to be invalid, Apple is willfully infringing and the attempt by Apple to do a workaround cost them more than $20 million per month and provided degraded service.

I really doubt your claim that the trial court will INCREASE any award considering the basis of the Appeals Court specified that the reversed errors had to do with the instructions on how to calculate the award, which the jury award based on the total price of the devices in suit:

"The law requires patentees to apportion the royalty down to a reasonable estimate of the value of its claimed technology, or else establish that its patented technology drove demand for the entire product," Chief Judge Sharon Prost wrote for a two-judge panel. A third judge resigned before the decision was issued.

It would be extremely difficult for VirtnetX to claim that Macs, iPod touch, iPads, and iPhones are purchased based only on the fact they have FaceTime capability. . . and not for any other reason. That is the bar they Appellate court set to even keep the amount where it was set because the jury was incorrectly instructed.

Your claim of "willfully" infringing is specious as that was not found in trial. willful is a legal term and requires a determination by the jury, not you. We are not noting any "degraded service" that you claim.

44 posted on 02/25/2015 7:44:24 PM PST by Swordmaker (This tag line is a Microsoft insult free zone... but if the insults to Mac users contnue...)
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To: HiTech RedNeck; T. P. Pole
Maybe there was no other evidence that could be brought to bear in that case. So filing priority won out.

There is no doubt about who got there first. The Patent office of the day numbered every document that came in. Bell's attorney brought his patent in in the morning and it was numbered "7" and Gray's caveat document was brought in later in the day and it was numbered "39".

45 posted on 02/25/2015 7:54:38 PM PST by Swordmaker (This tag line is a Microsoft insult free zone... but if the insults to Mac users contnue...)
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To: SueRae

Why on earth were they given patents? On a concept with no work done to prove the concept. Apple spent millions on actually developing the “concept” while Verntx spent zip! Why not get a bunch of patents for FTL, and do nothing to prove they work?


46 posted on 02/25/2015 9:04:40 PM PST by Dr. Bogus Pachysandra (Don't touch that thing Don't let anybody touch that thing!I'm a Doctor and I won't touch that thing!)
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To: IncPen; All
As the information that IncPen provided to me demonstrated, SmartFlash was an actual device they made back in the late 1990s. . . but apparently it didn't go anywhere as a successful product. IncPen says they sold a kajillion of them, but to be successful, both ends of the pipeline, buyer and seller, would have to buy into the product technology, and the sellers did not adopt it.

Looking more into the lawsuit, it lists several APP makers as defendants along with Apple. . . for in-app purchases. Apparently under their theory it is the iPhone, iPod touch, iPad, and Mac themselves that are the "dongle" connection for the app to make the purchase connection with the iTunes Music and App stores . . . quite a stretch of logic to apply their "invention" to a computer, a music player, a smartphone, and a tablet. . . which uses software. As I said, it is the BUSINESS MODEL PATENT which is being applied. The references at the bottom of the patents make that obvious. . . as does the need for BOTH ends of the pipeline to buy into the technology which is what sank SmartFLash as a physical product in the first place, its business model.

Now that many other companies have come up with a different business models that work, but actually do not USE the SmartFlash described techniques, they are trying to claim they invented the entire secure purchasing over the Internet to one device from another or from the internet. Just because there are superficial similarities does not make the approaches the same.

47 posted on 02/25/2015 10:12:08 PM PST by Swordmaker (This tag line is a Microsoft insult free zone... but if the insults to Mac users contnue...)
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To: Swordmaker
Thanks for clarifying.

...as does the need for BOTH ends of the pipeline to buy into the technology which is what sank SmartFLash as a physical product in the first place, its business model.

It appears in retrospect that what sank SmartFlash is that it was quickly superseded by better implementations, and the fact that it was a tough sale at the time.

Regardless of the suit, Apple exceeded SF by leaps and bounds even as SF was struggling to get off the ground.

And now they've got ApplePay, which will change the game again.

48 posted on 02/25/2015 10:39:26 PM PST by IncPen (None of this would be happening if John Boehner were alive...)
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To: Swordmaker

And even in the unlikely case that SF wins on appeal, $532 million is a rounding error in Cupertino...


49 posted on 02/25/2015 10:40:59 PM PST by IncPen (None of this would be happening if John Boehner were alive...)
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To: Swordmaker

You are free to doubt away, but you are badly misinformed about the case. First, there is no degradation of service at present because Apple gave up on trying to work around either VPN on Demand or FaceTime. However, for the short period when a “workaround” using relay servers was in place, over 50,000 consumer complaints were filed with Apple, so they went back to infringing. Second, while I agree that the term “willful” has not been determined by Judge or jury to date, Apple continues to use technology that they have no license to use. Judge Davis’ penalty on the RRR was, in effect, a determination that Apple was willfully violating VHC patents. You seem to think that the security VHC provides Apple products is inconsequential, but in fact it is the centerpiece of Apple’s Ios system. VHC will introduce at trial that Apple said in the original trial that a workaround would take “about a month” and cost “less than 5 million”, when in fact there is still no workaround and an attempt to do so cost $20 million a month and provided poor quality service. Apple is screwed. Patents not invalid and Apple has been infringing them for almost 10 years. Even if the RRR is reduced, the total dollar amount for prior damages will be huge, and as by then VHC will have an available App for sale that will provide this security to others, the jury will have a cost it can use to peg damages to, which I am certain will be at least as large as originally determined.


50 posted on 02/26/2015 3:09:19 AM PST by burghguy
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To: Swordmaker

well that’s what I said, filing priority. also wasn’t this during a time when the USPTO required, where possible, a working model of the invention to be brought to it?


51 posted on 02/26/2015 4:19:19 AM PST by HiTech RedNeck (Embrace the Lion of Judah and He will roar for you and teach you to roar too. See my page.)
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To: Swordmaker

Patent trolls should be vanished off the planet, and not in a good way.


52 posted on 02/26/2015 5:07:39 AM PST by SunkenCiv (What do we want? REGIME CHANGE! When do we want it? NOW!)
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To: Swordmaker
"It would be extremely difficult for VirtnetX to claim that Macs, iPod touch, iPads, and iPhones are purchased based only on the fact they have FaceTime capability. . . and not for any other reason.

That is the bar they Appellate court set to even keep the amount where it was set because the jury was incorrectly instructed."

I hate FaceTime. I would never buy the iPhone or iPad because of FaceTime capability.

Never use it, ever.
53 posted on 02/26/2015 5:54:25 AM PST by Not gonna take it anymore (If Obama were twice as smart as he is, he would be a wit)
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To: Swordmaker

//Sometimes technology just becomes ripe. . . when all things start coming together in science.//

Perhaps...but I find it hard sometimes that some ideas or inventions come together just out of happenstance or coincidence! Humans can be inventive but I think some inspirations, motivations, or dreams of fancy come from sources just outside our ability to measure, observe or quantify. Why was the 18th thru the 21st century so different in terms of scientific advancement? Our earlier forbears had access to Greek and and other sources of knowledge. There are smart humans all thru history who could have made advances that could have taken their agrarian societies from dirt farming to the moon in less than 100 years....why just in the last 200 years and not back then?

I’ll tell you what I think.....”In the latter days I will pour out my spirit upon all flesh....”. Even if not all folks accept Christ as Saviour, the working genius of the Holy Spirit is working in the background to convict men of sin and to encourage those who are God’s children. Christians are salt but it is the Holy Spirit that carries our savor and influences even the learned men to create inventions that heal bodies and to fly to the moon and stars! It created the Judeo-Christian consensus that freed men’s minds to experiment with more freedom based constitutional systems. Ironically, while the belief in Jesus Christ is castigated as superstition, it was the widely held belief in Christ that created a new macro-cognitive awareness, a new societal paradigm that helped free men from superstition and fear of the grave that allowed the sciences to flourish! Helping the weak and sick, help the poor and needy, educating the uneducated, prison reforms; all of the exhortations of Jesus Christ, that to see him is to find him in the needs and frailties of others, have been written into the frame of western civilization. This warp and weft of traditions is what Satan and his deluded followers are now trying to unweave.


54 posted on 02/26/2015 6:44:51 AM PST by mdmathis6
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To: Swordmaker
Your first sentence is total BS, fireman15. Apple and Google do not spend more money on their legal departments than on research. Apple spent under $375 million on legal defense expenses in 2014, which was admittedly very high, however they spend a lot more on Research.

I did not mean any offense Swordmaker. I have always valued your advice and the knowledge that you have of Apple products. I was strictly quoting from articles that I have read on multiple occasions all of which have indicated that Apple is spending far, far more than $375 million on their legal team. To be honest I am completely baffled by your figure. Are you carefully choosing your words by saying “legal defense” which may have a more specific meaning than legal team? If so then shame on you.

First I would bring this article to your attention:

http://gizmodo.com/5949909/apple-and-google-spent-more-money-on-legal-fees-than-rd-last-year-and-google-apparently-thinks-apple-wants-it-that-way

Has Apple slashed their legal teams budget and thrown hundreds of hapless ambulance chasers back out on the streets? It doesn't appear so... I will bring to your attention an article that headlines that Apples legal budget increased to $3.4 billion dollars in 2012:

http://techcrunch.com/2012/10/31/apples-rd-spending-climbs-1-billion-to-3-4-billion-during-fy-2012/

Then here is another article from CNET that claims that Apples legal budget increased and additional 32% from 2102 to 2013 to $4.5 billion but they say that their rivals Microsoft and Google spent even more.

http://www.cnet.com/news/apples-r-d-up-32-percent-in-2013-still-dwarfed-by-rivals/

This article of course also makes my point, without intending any disrespect to Apple. My contention is that our legal system is broken and we have many of our society's most talented people squandering their time and effort trying to either rip each other off or defending against those who are using the system to rip other people off. If I am being misled by a vast body of the evidence that would seem to refute your statements then please explain.

55 posted on 02/26/2015 8:05:53 AM PST by fireman15 (Check your facts before making ignorant statements.)
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To: backwoods-engineer
Which is why intellectual property publication has become a big business.

Making something public is as easy as putting it up on a website or somesuch (the announcement board of your local church would serve the same purpose in principle). Basically, close to zero cost. What is the 'big business' angle you refer to?

56 posted on 02/26/2015 12:35:30 PM PST by Moltke ("The Press, Watson, is a most valuable institution if you only know how to use it.")
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To: fireman15; Swordmaker

As Emily Latella Gilda Radner would have said on SNL in the late 1970s... “NEVER MIND”!


57 posted on 02/26/2015 3:55:18 PM PST by fireman15 (Check your facts before making ignorant statements.)
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To: HiTech RedNeck
well that’s what I said, filing priority. also wasn’t this during a time when the USPTO required, where possible, a working model of the invention to be brought to it?

Yes, but at some point, the Patent Office was running out of storage space for the patent models. The expense of leasing and buying space was breaking their budget so they dropped the requirement.

58 posted on 02/26/2015 6:16:13 PM PST by Swordmaker (This tag line is a Microsoft insult free zone... but if the insults to Mac users contnue...)
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To: IncPen

How, exactly does that align with how iTunes stores and retrieves data? Indeed, removable flash storage, itself, is a broad concept that has been in use longer than the patent has been issued.


59 posted on 02/26/2015 7:06:35 PM PST by TheBattman (Isn't the lesser evil... still evil?)
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To: Swordmaker

Of course, real data, facts, evidence, and reality won’t make a difference to the Apple-hating trolls who froth at the mouth to see the MOST SUCCESSFUL corporation in this nation loose something.


60 posted on 02/26/2015 7:10:53 PM PST by TheBattman (Isn't the lesser evil... still evil?)
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