Apple Won't Have to Pay $309M After Judge Accuses Patent Troll of Abusing System to Fleece Tech Companies
Apple today scored a victory in an ongoing patent dispute with Personalized Media Communications (PMC), with the judge overseeing the case tossing out the $308.5 million verdict that Personalized Media Communications won in March, reports Bloomberg.
Apple was a victim of PMC's plan to milk the tech industry for high royalties on old ideas, U.S. District Judge Rodney Gilstrap said when delivering the verdict. The judge decided that PMC's patent for digital rights management is unenforceable because the company delayed its application with the U.S. Patent and Trademark Office in an attempt to get more money.
PMC filed hundreds patent applications in the 1980s and 1990s, but no patents were awarded until 2010. The company took advantage of a loophole that allowed for an indefinite application process and then a patent valid for 17 years. This was addressed in 1995, but didn't apply to the patents used against Apple because they were filed earlier.
PMC delayed receiving its patents until after the technology in the patent had already been adopted, letting it make more money from tech companies.
Internal documentation from PMC suggested the company had thought that Apple would be a "natural candidate" to target with delayed patents, along with Intel, IBM, and Microsoft.
PMC won a $308.5 million verdict against Apple in March after a jury said that Apple infringed on DRM patents with its FairPlay technology that is used to distribute encrypted content through iTunes, the App Store, and Apple Music.
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Top Rated Comments
Instead, they intentionally delayed actually getting the patents until at least 2010, well over 17 years after they publicized the idea in the first place and only once the ideas were in widespread use. At no point between whenever they applied and when the patent was granted two decades later did they actually attempt to develop, market, or otherwise use these ideas for the benefit of society, or themselves. In fact, their entire strategy was to lie low and hope nobody even noticed, eventually developed the same thing independently, and it became widespread.
They did this with the express purpose of extending the patent profit window well past the 17-year limit. Worse, they abused how it worked to patent something that had been developed decades ago, re-developed since, and was already in common use and maybe had been for years. And then they didn't defend it, they waited even longer until a big target started using it so they had someone to cash in on.
They didn't create anything, they gamed the system.
As noted in the article, the USPTO actually closed this loophole 26 years ago, way back in 1995, because they realized it was stupid and open to abuse. But this company started the long con before then so got the con grandfathered in.
All of this is exacerbated by how vague the patent office will allow tech patents to be, so you can patent just about anything, and the only defense for society is that at least it can't extend past 17 years.
It's pretty much a guaranteed recipe for profit: Come up with some either vague or extremely specific tech ideas that aren't currently being used but seem like they might be some day. File for patents on them, then wait however long it takes for them to actually be used. Then wait some more until they're in use by a big, rich company. Finish the patent application process, and sue.
You never built anything, your idea has been public for decades, and you get a huge-money payout for doing nothing but applying for patents on a bunch of ideas that aren't yet usable and playing the waiting game.