Apple Patent Infringement Loss Ping!
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Posted on 02/25/2015 11:52:36 AM PST by Citizen Zed
A federal jury has ruled that Apple willfully infringed on patents when developing iTunes' data storage systems, following eight hours of deliberation. The Tyler, Texas–based judge presiding over the case has ordered the company to pay $532.9 million in damages, according to Reuters.
The plaintiff, Smartflash LLC — which is based on the British Virgin Island of Tortola but also has a Texas address — filed the suit (viewable as a PDF) in May 2013, seeking $852 million in damages and citing six patents that related to the storing and accessing of songs, videos and games. The company does not make any products, nor does it have any employees other than founder Patrick Racz, who is a co-investor in the patents.
At the time, the suit named three game manufacturers as defendants in addition to Apple, claiming that another one of iTunes' functions violated Smartflash's in-app-purchase patents, but they were later dismissed from the suit. Regarding Apple's role, it claimed that Racz had met with one of Apple's current senior directors, Augustin Ferrugia, in 2000 when he was at another company to discuss the technology related to the patents. Bloomberg reports that Smartflash also claimed it deserved a percentage of sales of iPhones, iPads and Macs, which use iTunes.
Apple had attempted to get the case thrown out, claiming that Smartflash's technology was too generic for patenting, Reuters reported, but the judge who presided over the case ruled against them. Apple's subsequent argument in trial was that the jury should deem Smartflash's patents invalid because other, previously patented technologies had similar functions, and were worth only $4.5 million.
Bloomberg reports that Apple made $18 billion off iTunes in the last fiscal year, about 10 percent of the company's total revenue.
(Excerpt) Read more at rollingstone.com ...
Slow clap.
I'm no friend of Apple's, but I can't stand these parasites. They do nothing but destroy.
Apple has created plenty of US jobs. Most people just don't know about the connections to other companies, so they don't see it.
As a patent holder myself of advanced electronic and communication patents, I DESPISE first-to-file. It advantages foreign government-funded research over the US model of companies and individual inventors.
Which is why intellectual property publication has become a big business.
Check out my post #9. In this case, it may in fact not be trolling.
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.
Smartflash partnered with Britney Spears, and one of her lawyers is alleged in the suit to have conveyed material knowledge of the device to Samsung, one of the defendants.
Britney, at the time she was involved with Smartflash was also a celebrity spokesperson for Samsung, thus the connection.
none of which is in any way relevant re. patent infringement
for technology Apple invented,”
unless that is true and they took the necessary steps to secure their invention rights. If someone independently makes the same invention and beats you to the filing - you snooze, you lose. Given the incredible economic power that Apple represents, I doubt that they don't file their inventions as soon as possible. The richest company on the planet? Really?
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.
There really is almost no way for the public to know who the real innovator really was once the lawyers get their claws into it. There are so many ways that the system is manipulated.
Interesting article about Apple, and why they went overseas;
So, approx 362 million for the patent troll and 177 million for his lawyers. Thats a fun day in court.
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.
It’s a sad era when the communists have made capitalism more appealing there than we can here.
Without patent, tax and tort reform Jobs was 100% correct in that that work will never come back here again.
Maybe there was no other evidence that could be brought to bear in that case. So filing priority won out.
Patents have turned into a sick game with their volume. At least it isn’t as sick as the game of copyrights. Nobody actually READS the patents because they don’t want to raise any suggestion that they ripped one off.
The award amount may still be in dispute..but they also agreed with the lower court that the Virnetx patents are NOT invalid and that Apple IS guilty of infringement.
Exactly right. Oh those pesky details. Apple may actually end up paying MORE. They probably have spent at least that much in lawyer fees, between appeals and IPR filings.(all but one have been rejected by the PTAB)
I thought that once a product hit the market, anything not patented in the product was not subject to lawsuits. This works two ways ...
1> The company that sells the product cannot patent anything after release (assuming there is no patent pending associated with the product).
2> Someone cannot prior state of the art ... if the company was reverse engineering an existing product, how can they patent anything if the product is already being sold?
I am aware of companies that buy failing companies for pennies on the dollars just to get a hold of patents and sue their way to prosperity. What kills me is that the people doing the suing usually have no idea what they’re talking about ... they usually pay a consultant a sick amount of money to translate the patents for the leeches to issue the lawsuit.
I’m torn over this ... one one hand, they legally own the IP, but on the other hand, there are so many of these lawsuits filed frivolously. Taxpayers pay for that.
I’m no Apple fan, but I’d bet good money they’re getting screwed here. I don’t care if they’re worth a quadrillion dollars ... it doesn’t sound like anything mentioned in this article is patentable.
We really need a better system for patents ... one idiot at a mid sized company I worked at filed patents for some of the most insane, indefensible, indescribable crap I’ve ever read. He always managed to go directly to lawyers when various engineering teams weren’t available for peer review. He made something like $300K off that scheme of his. He laughed all the way to the bank exploiting the bonuses he somehow earned, but you’ve got to be a special breed of scum to make a living filing nonsense all day long. The Patent Office reviewed and approved his garbage though ... doesn’t say much about them too.
Well, then maybe Verntx should pay Apple for the real world development of it’s patent?
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Actually no. You need to read the patents in suit. There are seven patents all virtually identical to the first. They are BUSINESS MODEL PATENTS. . . for a business that the "inventor" does not and never has practiced. He essentially claims to have invented the idea of buying digital content over the Internet with a credit/debit card so one could download or have access to the content for streaming. He doesn't really described the MEANS of doing it, just the idea of doing it. . . saying the buyer could use his card to buy it, then get access, proving he has the right to download it, because he used a card, which could then be used again to access the same content again later as proof he had the right for access. He also claimed in court to have invented the concept of Digital Rights Management because he mentions the content could be protected "somehow by codes or encrypted" in his patent. Again, he doesn't say HOW to do that, just that the customer would be somehow provided with the key to decrypt the content after paying with their credit card.
In a later patent filed in 2010, he changes that to downloads to the devices. . . so that they don't have to access it later with their credit/debit card. Of course, this was already being done on multiple devices by many manufacturers and carriers before he even filed his "unique and unobvious invention."
Actually, they weren't. Elisha Gray filed what was called a patent caveat. . . not a patent application. A caveat was an old document that one could file with the patent office indicating that one INTENDED to file a patent in the future for a specified invention. it included drawings and description, but without claims, or proof of patentability. It expired after one year. Caveats were discontinued in 1909. A caveat does not carry the same weight as a patent application. Some argued that Gray had filed a caveat a month prior to Bell's Patent application and that Bell had bribed the examiner $100 to see Gray's patent and had stolen a key design element, the liquid modulator. However, since Gray's caveat was filed several hours after Bell's patent was filed, that is simply not possible.
There were actually EIGHT phone patents or caveats filed within a two week period. Sometimes technology just becomes ripe. . . when all things start coming together in science.
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