Apple Ordered to Pay $309 Million for Infringing DRM Patent

A federal jury in Texas has ordered Apple to pay around $308.5 million to a local licensing firm for infringing a patent related to digital rights management, reports Bloomberg.

Following a five-day trial, jurors on Friday said Apple must pay running loyalty fees to Texas-based Personalized Media Communications (PMC). A running loyalty is generally based on the amount of sales of a product or service.

PMC originally sued Apple in 2015 for allegedly infringing seven of its patents. As part of the legal action, the company claimed Apple infringed its patent with technology including FairPlay, which is used to distribute encrypted content through the company's iTunes, App Store, and Apple Music apps.

Apple successfully challenged PMC's case at the U.S. patent office, but an appeals court reversed that decision in March 2020, opening an avenue for a trial to proceed.

Apple told Bloomberg it was disappointed with Friday's ruling and would appeal the decision.

"Cases like this, brought by companies that don't make or sell any products, stifle innovation and ultimately harm consumers," the company said in an emailed statement.

PMC is a non-practicing entity that holds a patent portfolio and generates revenue through patent litigation. When such companies employ hardball legal tactics to enforce patent rights far beyond the patent's actual value, they are often referred to as patent trolls.

The Sugarland-based company has infringement cases pending against several other tech companies including Netflix, Google, and Amazon.

Top Rated Comments

svanstrom Avatar
11 months ago

Use it or lose it. Bloody patent trolls.
That's a simplified truth, though.

In theory there's nothing wrong with a firm specialising in research and licensing their patents, and there's nothing wrong with specialised firms investing in buying patents; but there needs to be a system for punishing those that intentionally do nothing but play with patents just to litigate. Not to help legitimate patent owners, but to intentionally just go for maximum damage/reward by a form of strategic and legal blackmail.

It's all about intent…
Score: 30 Votes (Like | Disagree)
obamtl Avatar
11 months ago
What sometimes pisses me off about some of these patents is that they're not even functional technology or fully developed methodology, but sometimes just ideas. Ideas are cheap, implementation is gold. There needs to be a higher standard for what counts as patents, and it should be to protect those who do the hard work to turn an idea into something implementable.
Score: 18 Votes (Like | Disagree)
markfc Avatar
11 months ago
Use it or lose it. Bloody patent trolls.
Score: 17 Votes (Like | Disagree)
kennyt72 Avatar
11 months ago

there's nothing wrong with a firm specialising in research and licensing their patents
That's exactly what this firm does (research and invent), but as they've sued Apple they're going to classed as patent trolls here as per usual.
Score: 11 Votes (Like | Disagree)
sracer Avatar
11 months ago

Only the creator of the patent should have the right to sue without restrictions. The onus should be on the patent troll to prove they had realistic plans and investment to do something with the patent and they lost out financially. Acting like Smaug, sitting on a pile of patents and with no intention of doing anything with them, should prevent them from taking legal action. It’s essentially a honey trap.
Well, that's not how the patent system works. Everybody is gaming the system... patent trolls, patent attorneys, and companies... including Apple.

People would be surprised to know just how many patents tech companies sit on simply to prevent their competitors from... well... competing. Google, Apple, IBM, Microsoft, etc. They own patents that they haven't used in products and have no plans or interests in doing so... they're simply defensive patents.

And with the loosening of patent laws regarding what is allowed to be patented, it's to the point of absurdity.

I understand it is low hanging fruit to go after the patent trolls, but the problem goes far deeper and far wider than that... and on the whole, the patent system is overwhelmingly tilted toward companies like Apple. These kind of settlements are a little token sacrifice to the patent gods. :)

If companies were being so damaged by patent laws, they'd be lobbying congress heavily to get the laws changed. ;)
Score: 9 Votes (Like | Disagree)
nexesnex Avatar
11 months ago

That's a simplified truth, though.

In theory there's nothing wrong with a firm specialising in research and licensing their patents, and there's nothing wrong with specialised firms investing in buying patents; but there needs to be a system for punishing those that intentionally do nothing but play with patents just to litigate. Not to help legitimate patent owners, but to intentionally just go for maximum damage/reward by a form of strategic and legal blackmail.

It's all about intent…
I agree with you. The problem with this place is that they seem to only have 6 employees... all people who are lawyers or experts by trade in the defense of patents. If it truly was a company who wanted o do right, you'd think they have a sales and licensing group, etc....
Score: 9 Votes (Like | Disagree)

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