Apple Inc. has been ordered to pay $532.9 million in a patent infringement case. A federal jury in Texas found that Apple’s iTunes software infringed three patents owned by patent licensing firm Smartflash LLC. Even though Smartflash had been asking for $852 million in damages, this verdict was said to still be a blow to Apple. The jury determined Apple had not only used Smartflash’s patents without permission, but did so willfully. That’s a most significant ruling.
Apple, which said it would appeal, said the outcome was another reason reform was needed in the patent system to curb litigation by companies that don’t make products themselves. Apple said in a statement:
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 sued Apple in May 2013, alleging its iTunes software infringed its patents related to accessing and storing downloaded songs, videos and games.
The trial was held in Tyler, Texas, which in the past decade has become a focus for patent litigation. Smartflash’s registered office is also in Tyler. It was also in a federal court in Tyler that a jury in 2012 ordered Apple to pay $368 million to VirnetX Inc. for patent infringement. A federal appeals court later threw out that damages figure, saying it was wrongly calculated. U.S. District Judge Rodney Gilstrap, who presided over the case, ruled that Smartflash’s technology was not too basic to deserve the patents.
Apple had asked the jury to find Smartflash’s patents invalid because previously patented inventions covered the same technology. It was alleged in Smartflash’s suit that around 2000, the co-inventor of its patents, Patrick Racz, had met with executives of what is now European SIM card maker Gemalto SA, including Augustin Farrugia, who is now a senior director at Apple. Smartflash has also filed patent infringement lawsuits against Samsung Electronics Co Ltd, HTC Corp and Google Inc. The case is in the U.S. District Court for the Eastern District of Texas.
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