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Apple Must Pay $533 Million for Patent Infringement
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A jury has determined that Apple infringed several of Smartflash's patents.

Summary: Apple must pay over $500 million to a company that claimed it infringed several of its patents.

According to Reuters, a federal jury has found that Apple’s iTunes software infringed three patents owned by a patent licensing firm called Smartflash LLC. Apple must pay $532.9 million in damages.


Smartflash had originally sought $852 million in damages, but the award is still a big hit to Apple. The jury deliberated for eight hours and determined that Apple not only used the patents without Smartflash’s permission, but that used them willfully. Apple had argued that the patents were, at most, worth $4.5 million, according to Bloomberg.

Apple has already stated that it will appeal the decision. Apple added that reform was needed in the patent system to slow litigation by companies that do not manufacture products themselves. According to the Wall Street Journal, Apple issued a statement, saying, “Smartflash makes no products, has no employees, creates no jobs, has no U.S. presence, and is exploiting our patent system to seek royalties for technology Apple invented.”

In November, Apple had to pay $20 million for patent infringement.

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In a statement, Apple said, “We refused to pay off this company for the ideas our employees spent years innovating and unfortunately we have been left with no choice but to take this fight up through the court system.”

Smartflash filed suit against Apple in May of 2013, arguing that the iTunes software infringed patents related to both accessing and storing songs, videos, and games that had been downloaded.

Brad Caldwell, one of Smartflash’s attorneys, said, “Smartflash is very happy with the jury’s verdict, which recognizes Apple’s longstanding willful infringement.”

The trial was held in Tyler, Texas, which has become a hot spot for patent litigation in the last ten years. Smartflash’s registered office is also located in Tyler.

Should Smartflash have been able to sue for the alleged patent violations?

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In 2012, a Tyler federal court jury awarded $368 million to VirnetX Inc. for patent infringement—also by Apple. However, an appeals court later overturned that award because it had been incorrectly calculated.

Samsung has sued Nvidia for patent infringement and false advertising.

Apple had tried to avoid the Smartflash trial by having the suit dismissed. U.S. District Judge Rodney Gilstrap determined that the technology was not so basic that it did not deserve the patents.

Apple had argued that the patents were not valid because previously patented inventions covered the same type of technology.

Smartflash’s complaint said that around the year 2000, Patrick Racz, the co-inventor of its patents, met with executives of what is now Gemalto SA, a SIM card manufacturer. One of the executives was Augustin Farrugia, a senior director at Apple.

Microsoft has sued Samsung for patent royalties.

Smartflash also has patent infringement suits pending against Samsung Electronics Co. Ltd., Google Inc., and HTC Corp.

Source: Reuters

Photo credit: Bloomberg




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