Apple Ordered to Pay $532.9 Million in iTunes-Related Patent Lawsuit

itunesiconA federal jury in Tyler, Texas has ordered Apple to pay $532.9 million to patent licensing firm Smartflash LLC for using its patents without permission, reports Bloomberg. The court found certain iTunes apps to be infringing upon the Texas-based company's patents related to digital rights management, data storage and managing access through payment systems.

Apple argues that Smartflash is exploiting the patent system and plans to appeal the decision.

“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,” said Kristin Huguet, an Apple spokeswoman. “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 was originally seeking $852 million in damages from Apple for infringing three patents, claiming that it was entitled to a percentage of sales of Apple products used to access iTunes, such as iPhones, iPads and Macs. Apple believed that $4.5 million was fair at most, arguing that it was not infringing upon the inventions and that the patents were invalid. Developers Game Circus and KingsIsle Entertainment Inc. were also defendants in the case but were later dismissed from the lawsuit.

“Apple doesn’t respect Smartflash’s inventions,” the company’s lawyer, John Ward of Ward & Smith in Longview, Texas, told the jury. “Not a single witness could be bothered with reviewing the patent.”

Smartflash has also sued Samsung Electronics in a separate lawsuit that is scheduled to begin following the end of this Apple trial. The patent licensing firm also recently filed against Google, which has attempted to move its lawsuit to California, and Amazon in December. This case is Smartflash LLC v. Apple Inc., 13-447, in the U.S. District Court for the District of Texas.

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Top Rated Comments

samcraig Avatar
122 months ago
I think it's hard to comment on cases like this.

Just because it may appear like a money grab - doesn't mean it is. If there's a company or person that legitimately has a patent and wants to test the courts because they believe their patent holds up, they should have the right to do that. Apple's argument about creating job is irrelevant.

And honestly - Apple has sued plenty based on patents that other companies have probably "spent years innovating."

I don't fault Apple for fighting this either. If you believe you haven't "violated" patents that exists, you should take it to court as well.

But no doubt this thread will be filled with people crying patent trolls without knowing all the facts.

One of the ultimate truths is - there is often one (or similar) solution that makes sense and in this day and age - it's nearly impossible to NOT "violate" SOMEONE's patent. I would say this is done completely unknowingly. Not deliberately.

The problem is deeper - it's the patent system in general and how it currently works.
Score: 44 Votes (Like | Disagree)
farewelwilliams Avatar
122 months ago
let's make the faces of patent trolls popular so everyone will hate them in person.
Score: 21 Votes (Like | Disagree)
DTphonehome Avatar
122 months ago
Isn't this one of those East Texas courts that are notoriously friendly toward patent trolls?
Score: 18 Votes (Like | Disagree)
bbeagle Avatar
122 months ago
Funny, Apple whining about someone suing it for using technology it invented.... Yea right.

Apparently Apple didnt invent the technology...This other firm was issued the patent for it. Seems they were first, or the company that they obtained the patent from was first. Apple's just mad that they got caught and their army of millionaire lawyers couldnt find a way to get them off the hook. Pay up.

Maybe they can do what samsung did, pay in nickels.

Samsung is the next to be sued. You'll be okay when Samsung has to pay $500 million or so too, right?

It's a PATENT TROLL. Everyone should be against them. They're thieves. That's all they are. It's a way a group of lawyers can get rich quick and HAMPERS innvoation.
Score: 14 Votes (Like | Disagree)
Robert.Walter Avatar
122 months ago
They are basically calling the company a patent troll. They can't use those exact words without facing a defamation suit so they are sticking to factual claims.
Frankly, I don't understand the meme of patent troll, and why anybody who invents, patents, and defends their patents is automatically labeled troll for doing this if they are not a big name company.

Likewise, companies that buy and exploit patents for their economic potential, why are these labelled trolls? It's like those accused of infringement wave the troll card in an attempt to create a different class of patent holder, one not entitled to gain economic benefit from their IP nor be allowed to defend it.

If the idea of Intellectual Property is to have any value, and the process of protecting it, i.e. by patenting and defending it, and the process of it being portable through sale, assignment, or licensing, just like any other property is to have any meaning, we have to stop waving the troll flag any time the owner of a patent wants to assert the right to defend said patent when it feels that patent is being infringed.

To continue to say troll this and troll that and "it's a troll just because they are a foreigner, or don't manufacture, or don't create US jobs"*, is just stupid and undermines the whole idea of what a patented invention is.

* none of which are the basis of a patent award or the holder's right to defend.
Score: 12 Votes (Like | Disagree)
Crosscreek Avatar
122 months ago
Patent Trolls.
Score: 12 Votes (Like | Disagree)