Apple Closer to Escaping $533 Million Verdict Won by Smartflash LLC

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The U.S. Patent and Trademark Office on May 26 invalidated two of three patents owned by Smartflash LLC, a patent licensing firm that was awarded a $532.9 million verdict against Apple in February 2015, according to Bloomberg.
A three-judge panel at the patent agency found that the two patents never should have been issued in the first place because the idea of storing and paying for data is an abstract concept, not a specific invention.
A third patent owned by Smartflash LLC was also invalidated in late March, increasing the odds that Apple will not have to pay the large sum. Smartflash LLC, which fits the description of a patent troll, can still ask the Patent Trial and Appeal Board to reconsider and file an appeal with the U.S. Court of Appeals for the Federal Circuit.

Last year, a federal jury for the U.S. District Court for the Eastern District of Texas found certain iTunes apps to be infringing upon Smartflash LLC's patents, related to digital rights management, data storage, and managing access through payment systems. Apple appealed the decision, arguing that the patents were invalid.

Smartflash LLC also targeted Samsung and Google with similar patent infringement claims.

Article Link: Apple Closer to Escaping $533 Million Verdict Won by Smartflash LLC
 

ArtOfWarfare

macrumors G3
Nov 26, 2007
8,740
4,417
I think I'd be in favor of throwing out patents entirely.

I don't see any reason for them to exist.

They supposedly exist to protect inventors... but from what?

If patents didn't exist:
I put a lot of effort into R&D. Bring my product to market. I'm now the only person selling my product for a period of time.
You want to duplicate my product. You buy it. You invest in reverse engineering. You can now also sell the product.

How is the original person who invested in R&D harmed? They still made their initial profits. Their future profits might decline... but so what? Can't rest on your laurels. Consumers benefit because they have more choice.

If patents worked perfectly:
I put a lot of effort into R&D. Bring my product to market. Charge insane prices because I have a monopoly.

The way patents actually work right now:
Starts the same way as if they didn't exist. But wait, a patent troll exists! The person who invested in the R&D gets a BS lawsuit!

Patents make no freaking sense. If they worked perfectly, it would be terrible for consumers. If they didn't exist at all, it would be ideal for consumers. As is, they're terrible for everything but patent trolls and lawyers... consumers and inventors both suffer in the current system.
 

mattopotamus

macrumors G5
Jun 12, 2012
13,689
4,109
How can you be awarded a patent and then it be deemed "not patentable". Doesn't that defeat the entire purpose?
 

Kaibelf

Suspended
Apr 29, 2009
2,445
7,435
Silicon Valley, CA
How can you be awarded a patent and then it be deemed "not patentable". Doesn't that defeat the entire purpose?
Why have appeals in courts at all? After all, local juries never make errors. In this case, some moron as the patent office rubber stamped a vague "invention" and this was the method used to clear it up.
 
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TheAppleFairy

macrumors 68030
Mar 28, 2013
2,566
2,180
The Clinton Archipelago unfortunately
If patents didn't exist:
I put a lot of effort into R&D. Bring my product to market. I'm now the only person selling my product for a period of time.
You want to duplicate my product. You buy it. You invest in reverse engineering. You can now also sell the product.

That's an awful idea, large companies who can outsource and come up with money easily could squash little guys before they even get a chance to start making a profit.
 
I think I'd be in favor of throwing out patents entirely. I don't see any reason for them to exist. They supposedly exist to protect inventors... but from what?

If patents didn't exist:
I put a lot of effort into R&D. Bring my product to market. I'm now the only person selling my product for a period of time.
You want to duplicate my product. You buy it. You invest in reverse engineering. You can now also sell the product.
Com'on man. Read Tesla's story and consider the above. He did the big thinking and then the big inventing that is still crucially important to all of our lives today. What he always lacked? The money to thoroughly bring his inventions to market. Bigger players with deeper pockets exploited his inventions and got very, very rich... continuing to reap the profits from his inventions to this day. He died penniless.

Fundamentally, a patent allows the poorest of the poor to invent something and get compensated for it... either by finding a way to bring it to market or by those who have such resources licensing the invention from him or her. Either way, the inventor gets paid for their innovation.

As is now, gigantic corporations will just skip the licensing and implement inventors work and then fight the poor inventor in court if the inventor can bring themselves to try to take on Goliath. Goliath can pay a 100 of the best attorneys while poor inventor can't necessarily even pay for 1 poor one. And still, because there is a granted patent, the inventor may get paid anyway for their invention.

Are there flaws in the patent system? Yes, plenty... especially when it comes to patenting software (which, IMO, should fall under copyright law, not patent law) and fundamental tech (like rounded rectangles).

Do as you suggest- basically kill the system of patents altogether- and only the big corporations would have the incentives to invent and share their inventions with the world in products. A Tesla could not do his kind of thing in such a world. And, if so, you & I might be reading each others posts by candlelight, probably written in ink on parchment paper without the work of the Teslas.

If the patent system is good when it works for Apple is should be just as good when it works against Apple. Apple- and our Apple halo opinions- cannot have it both ways.
 

pat500000

Suspended
Jun 3, 2015
8,523
7,512
Can we ban suing? Let them duke it out in the ally. I think apple should worry about wifi technology from cal tech lol.
 

MH01

Suspended
Feb 11, 2008
12,107
9,298
Why have appeals in courts at all? After all, local juries never make errors. In this case, some moron as the patent office rubber stamped a vague "invention" and this was the method used to clear it up.
Just like Samsung cleared up the mistake the court handed them?

The system is broken . The whole lot of them are guilty of abusing it . Those with large amount of money like Samsung and Apple go to court and get out of paying.

In many cases patents should not even be given , as they lead to trolls , and block innovation
 

DynaFXD

macrumors 6502a
Jun 15, 2010
798
366
East Coast
That's an awful idea, large companies who can outsource and come up with money easily could squash little guys before they even get a chance to start making a profit.
A) Anybody can outsource, even individuals.
B) Big companies can still bleed the small guy dry by dragging them into court to argue prior art or any other reasonably flimsy excuse;
C) Big companies already use patents to keep others out of their sand box.

While I do not agree that there should be no patents. I do not like the idea of companies being able to buy them all up and wield them like a sword to take down others. There should be some system of 'use it or lose it.' IMHO.
 

TheAppleFairy

macrumors 68030
Mar 28, 2013
2,566
2,180
The Clinton Archipelago unfortunately
A) Anybody can outsource, even individuals.
B) Big companies can still bleed the small guy dry by dragging them into court to argue prior art or any other reasonably flimsy excuse;
C) Big companies already use patents to keep others out of their sand box.

While I do not agree that there should be no patents. I do not like the idea of companies being able to buy them all up and wield them like a sword to take down others. There should be some system of 'use it or lose it.' IMHO.
Yes anyone can outsource....Money makes it easier. Plus when you are producing in large quantities you get a better price. An individual is at a huge disadvantage. Patents can protect them to a degree.

Patents do expire, I guess you are for a shorter "inactive shelf life"? I could agree with that as long as they aren't in the process of using it or licensing it to someone else.
 

redscull

macrumors 6502a
Jul 1, 2010
775
731
Texas
Fundamentally, a patent allows the poorest of the poor to invent something and get compensated for it... either by finding a way to bring it to market or by those who have such resources licensing the invention from him or her. Either way, the inventor gets paid for their innovation.
You missed a case, the case that involves the patent trolls. You talk about how the big companies would squash the poor inventors, but you're defending big companies taking advantage of inventors nonetheless. Because that's exactly what patent trolls do. They woo the penniless inventor with a "nice" pay off then squat on the invention until they can file a huge suit against an even bigger company some time later. The actual inventor might never reap any further compensation, or maybe he was smart and gets some small cut of future lawsuits. But the vast majority of money changing hands is between big companies, not the inventors the patents are meant to help.

Patents should not be transferable, except perhaps to family members upon death. These big trolls shouldn't be able to collect up patents, squat on them, then file huge suits. And patent owners wishing to file suits should do so as soon as they see their patents being used illegally. Not wait multiple years so they can file against several devices. Only the first device infringed. After that, the patent holder failed to defend his patent. Finally, way too many software patents are total crap anyway. The fact is, it's not that hard for a software engineer to come up with the same idea, even a very similar implementation, that some patent holder has, even with absolutely no knowledge of that patent or that inventory or anything using that tech. That's just how software is; much of it is too obvious to be patentable, and yet the patents are awarded.
 
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Oh brother. So basically, rules that favor Apple at all others expense.

If the inventor sells his patent to anyone- troll or not- it's his or hers to sell... for whatever they can get for it.

If the buyer is a troll, then so be it. If the troll will ultimately seek compensation from an Apple, why didn't an Apple get in there and outbid the troll for the inventors patent in the first place?

Similarly, if an Apple is going to infringe, they certainly have the resources to know which patents upon which they may infringe. Instead of putting the burden on the patent holder or even the troll, why doesn't the Goliath wanting to use the patent approach the patent holder and strike their deal with them up front... BEFORE they infringe?

I hate the patent troll concept myself but the trolls of the world help the patents have value. They are a market for the inventors who get the patents. An Apple could be in that very same market outbidding them. Putting the burden on what is sometimes the poor inventor to police the whole world of potential infringers and catch them infringing early AND then taking expensive legal action to do something about it makes little practical sense. It's only after there is probably millions to be won that such an inventor can get a "good enough" lawyer to take on Goliath's team of 100 lawyers on commission on their behalf. If there's no juicy commission to be won, why does any good lawyer go toe-to-toe with 100 lawyers from Goliath Inc pro bono?

We can criticize the system all we want- and we certainly do (except when it's working FOR Apple and then we praise it and spin how Apple deserves every nickel for their patented innovations and intellectual property). But come up with a better system that works well for everyone involved... not just Apple.
 
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oneMadRssn

macrumors 603
Sep 8, 2011
5,181
12,065
Europe
I think I'd be in favor of throwing out patents entirely.

I don't see any reason for them to exist.

They supposedly exist to protect inventors... but from what?

If patents didn't exist:
I put a lot of effort into R&D. Bring my product to market. I'm now the only person selling my product for a period of time.
You want to duplicate my product. You buy it. You invest in reverse engineering. You can now also sell the product.

How is the original person who invested in R&D harmed? They still made their initial profits. Their future profits might decline... but so what? Can't rest on your laurels. Consumers benefit because they have more choice.
First, how are you going to bring your product to market? If you are independently wealthy, good for you. However, most others need investors or loans to help with that part. Investors would be more hesitant to invest, and banks will charge much higher interest, if there is no collateral or assets left of from a worst-case-scenario failure. Just in case you flub the going to market part of the operation, banks and investors want to see some valuable asset they can sell after the fact to recoup some of their losses. IP is that valuable asset.

Indeed, I think most of the trolls you see are the result of such failures. Startups fail, this is fine, it's part of the process. But those engineers had salaries, which were paid for by investors or banks. To recoup that loss, they sell the patents to companies that are willing to assert them. Without the ability to profit from assertion, the patents are worthless, and thus investors and banks don't get paid back, which means they are less willing to take risks on startups.

Second, it takes very very little time to reverse engineer most things. And the effort put forth is proportional to how successful your product appears. As soon as it looks like it would be profitable to do so, your product will be reverse engineered in a matter of weeks if not days. Look at companies like Chipworks - they have full circuit schematics of very advanced chips within a few weeks of their launch, and that is not on an expedited effort.

Do you really thing a few weeks or months of profitable operation is fair for inventions that could take years to develop?

If patents worked perfectly:
I put a lot of effort into R&D. Bring my product to market. Charge insane prices because I have a monopoly.

The way patents actually work right now:
Starts the same way as if they didn't exist. But wait, a patent troll exists! The person who invested in the R&D gets a BS lawsuit!

Patents make no freaking sense. If they worked perfectly, it would be terrible for consumers. If they didn't exist at all, it would be ideal for consumers. As is, they're terrible for everything but patent trolls and lawyers... consumers and inventors both suffer in the current system.
There are very few patent trolls compared to the huge number of successful stories of IP working as it should. It just doesn't make good headlines or get clicks. Look at companies like ARM - their entire business is licensing their IP to others such as Apple. Look at pretty much every startup that was able to get investors by leveraging their potential IP. Look at every university that is able to fund future research in part by licensing the fruits of prior research. Look at Apple, who probably wouldn't have been able to succeed with the iPhone had they not patented every single thing about it.

Also, patents do work as you said they should "perfectly." There are millions of examples, but one that has been in the news a lot lately is 3D printing - specifically the kind that melts plastic and uses essentially a printer head on a z-axis to inject the plastic onto a xy-axis table. (e.g., MakerBot) This technology was invented a while ago. It was patented and licensed to a few manufacturers who made very expensive 3D printers purchased mostly by big prototyping shops or big engineering companies. They did well raking it in for 20+ years on such great inventions. They did have to fight hard to keep rip-off printers off the US market the entire time, as there were plenty (especially in China) who reverse engineered this in no time at all. When the patents expired, it was as if overnight there were affordable consumer-level 3D printers from dozens of companies.
 
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redscull

macrumors 6502a
Jul 1, 2010
775
731
Texas
So basically, rules that favor Apple at all others expense.
No. I am by no means one of those types. I cannot even fathom how anything I said would lead you to believe that.
If the buyer is a troll, then so be it. If the troll will ultimately seek compensation from an Apple, why didn't an Apple get in there and outbid the troll for the inventors patent in the first place?
Now I am not sure you are actually reading what people reply. Apple/whoever didn't get in there in the first place for two reasons:

One, the inventor and/or his invention was unknown. Trolls buy up tech en mass at bargain prices from desperate inventors long before any of it is relevant. Most of those patents never pay off, but it doesn't matter so long as a few win the troll some major lawsuits. It's not like there was a big auction where Apple/whoever sees the patent and passes on it or intentionally decides not to license it.

Two, the patents are stupid. The software engineer at Apple or any other big or little company easily "invents" the exact same stuff with no knowledge of the existing patent, and it seems so obvious to them that they don't bother investigating. The troll also doesn't tell them they were accidentally using their patent and make a licensing offer; instead they wait it out until they can maximize their pay day.

That's how the system currently, actually works. I am not saying the concept of patents is bad, but how it presently works is pathetically broken.
 

JGRE

macrumors 65816
Oct 10, 2011
1,012
664
Dutch Mountains
Now hold up just one minute. :rolleyes: We can't kill the patent trolls. Otherwise, we'd have to kill Apple, Blackberry, Microsoft, Ericsson, and Sony. Because that little cabal formed a patent troll. Thankfully, they eventually came to their senses, but there's no denying they were a troll. And they went trolling.
A patent troll is a company that holds patents for no other reason than squeezing money out of it with no intention at all to monetize the patents in any products or services. The companies you name don't fit the definition.
 
No. I am by no means one of those types. I cannot even fathom how anything I said would lead you to believe that.
Now I am not sure you are actually reading what people reply. Apple/whoever didn't get in there in the first place for two reasons:

One, the inventor and/or his invention was unknown. Trolls buy up tech en mass at bargain prices from desperate inventors long before any of it is relevant. Most of those patents never pay off, but it doesn't matter so long as a few win the troll some major lawsuits. It's not like there was a big auction where Apple/whoever sees the patent and passes on it or intentionally decides not to license it.

Two, the patents are stupid. The software engineer at Apple or any other big or little company easily "invents" the exact same stuff with no knowledge of the existing patent, and it seems so obvious to them that they don't bother investigating. The troll also doesn't tell them they were accidentally using their patent and make a licensing offer; instead they wait it out until they can maximize their pay day.

That's how the system currently, actually works. I am not saying the concept of patents is bad, but how it presently works is pathetically broken.
OK, so when it's the other way- when something patented by Apple like the infamous "rounded rectangles" is being used against the copycats in patent cases for rounding their own rectangles, is that a stupid patent too? Because again, I read- in your comments- such fault in the system when the patents work against Apple. How about when Apple's patents seem just as stupid. Are they?
 

crescentmoon52

macrumors newbie
Jun 19, 2011
25
3
East Texas District Court is usually the place to file such claims with a good chance of a fast decision for the patent troll.....
 

oneMadRssn

macrumors 603
Sep 8, 2011
5,181
12,065
Europe
East Texas District Court is usually the place to file such claims with a good chance of a fast decision for the patent troll.....
First, fast decision is good. Typically people complaint how slow the courts are. Second, empirical studies of outcomes in courts have shown that the EDTX isn't more favorable to patent owners in the end. They are less willing to dismiss cases early on as compared to other courts, but ultimately the outcomes of those cases that go all the way don't generally differ in outcomes compared to other courts. The juries in that area do tend to favor patent owners slightly more, but the difference is not very drastic.

I think patent trolls go there because the judges are experienced with highly technical subject matter, the local rules of the court are efficient for patent cases, and the risk of having your case thrown out on an early motion is lower.
 
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