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

[r.harris1]

It's funny because every time I hear about Tyler, Texas in relation to all of these lawsuits, I think of it as this dusty two-building town, one for the lawyer and one for the judge, with some tumbleweed rolling by. Apparently it's got 100k people, give or take, and is the self-styled rose capitol of the US. Go figure.

 

[bennibeef]

Bad article from Macrumors. I dont want to research what the lawsuit was about nor I can remember if this was posted some months ago about what infringing patents it was about. Just one paragraph what it was about isnt too difficult.

Now I know Apple says they are trolling, but not about what.

 

[Robert.Walter]

Have you looked at their patents? It seems like almost anyone who has an online store that sells digital content would be in violation of this patent, but what is the actual invention?

Abstract:



Gotta love the last sentence:



http://patft1.uspto.gov/netacgi/nph...50&s1=7334720.PN.&OS=PN/7334720&RS=PN/7334720

No, I didnt review the patent.

The last paragraph is not unusual, I've seen it before.

The only question regarding the patent are the enforceable claims, and in the case of the same claim, the date of priority.

The litigation is used to determine the nuances of competing claims or coverage.

I also understand that there are firms out there that litigate anything just to try and extort a settlement, but in similar forums as this I've not seen any analysis which tries to clearly define Extortionary Troll or one that proposes the conditions under which a carve-out exemption for Extortionary Trolls might be created. (I'm not saying this haven't happened somewhere, only that I've not seen it in the material I casually come across.)

It would be nice if the conversation on this topic would move to whether Extortionary Trolls are just a part of the system we have to accept, in order to avoid abridging the rights of all inventors, or whether there needs to be more scrutiny and less open-endedness during the patent language approval process, or whether there is a clear definable meaning for Extortionary Trolls that could be used to proscribe their actions and business model that wouldn't harm other IP holders or their rights to sell their IP.

 

[skinned66]

Bad article from Macrumors. I dont want to research what the lawsuit was about nor I can remember if this was posted some months ago about what infringing patents it was about. Just one paragraph what it was about isnt too difficult.

Now I know Apple says they are trolling, but not about what.

Venue, location, patents related to iTunes - done. So far, that's all the relevant info I've gleaned from 3 sources about it.

EDIT: Okay, maybe "DRM" was unique to one.

 

[MagicBoy]

Patent trolls. Urgh. They'll lose on appeal outside of Texas.

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

Samsung didn't. That was a dumb internet myth.

 

[Zotaccian]

Apple believed... ....arguing that it was not infringing upon the inventions and that the patents were invalid.

Well, whenever Apple claims someone else's patent is invalid it always reminds me of "slide to unlock" -patent....

 

[GrumpyOldMac]

If any company has the resources to crush these parasitic trolls, it's Apple. You go Apple legal!

 

[zorinlynx]

Nah, it's fairly easy to comment.

If this were a company like Samsung, that actually produces a product and contributes to the economy, that would be one thing. The case might have some merit. But these patent trolls are not.

They produce nothing; all they do is acquire obscure patent portfolios from failing companies, then hire lawyers to look over them to try to find patents that might be violated by huge companies with lots of money, like Apple. Then they sue those companies and try to get damages or settlements.

These patent troll companies are a leech on this industry, and this practice needs to be shut down. Just because something is *legal* doesn't mean it should be allowed. Insider trading was once legal; do you think it should have continued to be permitted?

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.

 

[John.B]

A federal jury in Tyler, Texas ...

I've never understood what it is it about Tyler, Texas that makes that one jurisdiction ripe for patent lawsuits.

 

[snowleopardxman]

that is ridiculous. I went on there website. it's a joke. the design is awful. also, the person suing Samsung,Amazon,Google and Apple. is only doing this for a settlement. wouldn't this make it perjury?

[url=http://cdn.macrumors.com/im/macrumorsthreadlogodarkd.png]Image[/url]

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A 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 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.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.

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

 

[rhoydotp]

At the end of the day - the system is broken. But I do think that if someone comes up with a great idea - and they patent it - then they have the right to defend it.

In fact, I would actually say that patents aren't even valid UNTIL they are tested or challenged. Until then - it's just something "on paper."

I agree with you although you seem to contradict yourself. if the second principle is applied to this particular case, Apple wins. Just negates the first thing you said.

 

[Keirasplace]

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.

There is no invention. This things was "invented" by anyone who spend 30 minutes thinking about the issue in their bath tub...

 

[LordVic]

Here's the problem:

it s Apple telling us that this company is nothing but a patent troll.

How do we know the companies future directions for their invention / patent? Do they have plans in the future, when capital is raised to make the tech? Do they have plans to license the tech out? Will they sit on it till later date when they can figure out how to monetinize it?

this is all in the realm of possibility. Just because Apple is the larger company, doesn't mean they have some arbitrary right to infringe on someone elses patents, and then pass their own form of judgement on them.

Apple is no stranger to patent trolling themselves. I find it amusing that they call out others on it. Apple, and most tech companies have very large libraries of patents they have traded hands a few dozen times, that they keep in their back pockets, most unused, just to whip out in case of lawsuits. All companies really do this.

Simple fact: this company owns a patent, issued legally by the USPO. It is Apple's responsibility, under the current system to not infringe on that patent.

we can argue the validity of the patent all we want. We can argue the semantics of a Patent troll all we want, But the simple fact still remains. There is a patent. Apple infringed on Patent. Apple claims they don't want to pay

----------

There is no invention. This things was "invented" by anyone who spend 30 minutes thinking about the issue in their bath tub...

your favourite company is "guilty" of doing the exact same thing.

 

[subsonix]

The last paragraph is not unusual, I've seen it before.

Maybe, but when it's added to something that is already general enough to encompass regular use of internet protocols, encryption and a database it's pretty funny. You know, as if to make sure that any case is covered.

It would be nice if the conversation on this topic would move to whether Extortionary Trolls are just a part of the system we have to accept, in order to avoid abridging the rights of all inventors, or whether there needs to be more scrutiny and less open-endedness during the patent language approval process, or whether there is a clear definable meaning for Extortionary Trolls that could be used to proscribe their actions and business model that wouldn't harm other IP holders or their rights to sell their IP.

I believe more scrutiny in the approval process would weed out applications that are overly broad or general.

 

[samcraig]

Nah, it's fairly easy to comment.

If this were a company like Samsung, that actually produces a product and contributes to the economy, that would be one thing. The case might have some merit. But these patent trolls are not.

They produce nothing; all they do is acquire obscure patent portfolios from failing companies, then hire lawyers to look over them to try to find patents that might be violated by huge companies with lots of money, like Apple. Then they sue those companies and try to get damages or settlements.

These patent troll companies are a leech on this industry, and this practice needs to be shut down. Just because something is *legal* doesn't mean it should be allowed. Insider trading was once legal; do you think it should have continued to be permitted?

Let's not introduce an off topic scenario or straw man. Do you know the history of the patent and know that the plaintiff bought the patent?

I agree with you although you seem to contradict yourself. if the second principle is applied to this particular case, Apple wins. Just negates the first thing you said.

I don't think I contradicted myself. No one can "win" until the patent is tested and a ruling is made. Until then, the (valid) patent belongs to the plaintiff.

 

[LostMyiPhone]

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.

This is true... not always is it a money grab.

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.

They DO have the right to do that. Having the right to defend your patent is not the problem. Having a patent that you have zero intention on using for anything at all is.

Apple's argument about creating job is irrelevant.

Right, but what about their argument that Smartflash makes no products, has no employees, and has no U.S. presence? I think these are valid points. [assuming the claims are true] They prove that the company has no intention of making use of their patents.... the last one about having U.S. presence really just speaking to the fact that they're using a U.S. based system (patent law) without even being here.

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

So that makes it OK then? Is that what you're saying?

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.

The FACT is that the system is broken. It does not do what it was intended to do. It has too many vulnerabilities for exploitation.

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.

Finally... getting to the *real* issue. But first we had to defend the plaintiff, cite that the defendant has done the same thing before (making it OK?), then sympathize with the defendant -- cause *maybe* they believe they didn't do it, then give reason as to why this same scenario could be played out in many different facets.... before finally coming to the conclusion it's a broken system.

I don't disagree....with the last sentence of your post. I don't quite understand the point of the rest of it.

 

[Rodster]

this is all in the realm of possibility. Just because Apple is the larger company, doesn't mean they have some arbitrary right to infringe on someone elses patents, and then pass their own form of judgement on them.

Apple is no stranger to patent trolling themselves.

your favourite company is "guilty" of doing the exact same thing.

What goes around, comes around for patent trolls and APPL has benefited from it in the past. Man up and pay the fine

 

[GenesisST]

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.

Objectivity has no place here...

 

[lkrupp]

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.

Trolls cherry pick their facts to support their premise. The truth is their enemy.

 

[samcraig]

This is true... not always is it a money grab.



They DO have the right to do that. Having the right to defend your patent is not the problem. Having a patent that you have zero intention on using for anything at all is.



Right, but what about their argument that Smartflash makes no products, has no employees, and has no U.S. presence? I think these are valid points. [assuming the claims are true] They prove that the company has no intention of making use of their patents.... the last one about having U.S. presence really just speaking to the fact that they're using a U.S. based system (patent law) without even being here.



So that makes it OK then? Is that what you're saying?



The FACT is that the system is broken. It does not do what it was intended to do. It has too many vulnerabilities for exploitation.



Finally... getting to the *real* issue. But first we had to defend the plaintiff, cite that the defendant has done the same thing before (making it OK?), then sympathize with the defendant -- cause *maybe* they believe they didn't do it, then give reason as to why this same scenario could be played out in many different facets.... before finally coming to the conclusion it's a broken system.

I don't disagree....with the last sentence of your post. I don't quite understand the point of the rest of it.

Well thanks for "breaking it down" for me This is a forum. I state my opinion.

Let me break something down for you. I never said it was or was not OK for Apple to do the same. It certainly wasn't a justification. It was a statement.

Who here knows enough about the plaintiff and the case to determine whether or not they are "trolling." Who here knows how much R&D they did to arrive at their patent. How much money they spent. Whether or not they plan on doing something with it in the future.

These are not justifications or defending the plaintiff. They are questions that illustrate, again, that commenting on the nature is conjecture.

 

[RedOrchestra]

Obviously there's more to this story.

So what is Apple acknowledging if it's willing to payout $4.5 million - if it's not guilt?

Get ready to payout the $500 million plus, Apple.

 

[Keirasplace]

No, I didnt review the patent.

The last paragraph is not unusual, I've seen it before.

The only question regarding the patent are the enforceable claims, and in the case of the same claim, the date of priority.

The litigation is used to determine the nuances of competing claims or coverage.

I also understand that there are firms out there that litigate anything just to try and extort a settlement, but in similar forums as this I've not seen any analysis which tries to clearly define Extortionary Troll or one that proposes the conditions under which a carve-out exemption for Extortionary Trolls might be created. (I'm not saying this haven't happened somewhere, only that I've not seen it in the material I casually come across.)

It would be nice if the conversation on this topic would move to whether Extortionary Trolls are just a part of the system we have to accept, in order to avoid abridging the rights of all inventors, or whether there needs to be more scrutiny and less open-endedness during the patent language approval process, or whether there is a clear definable meaning for Extortionary Trolls that could be used to proscribe their actions and business model that wouldn't harm other IP holders or their rights to sell their IP.

The troll uses the broken down patent system that actually gives out patents for things that are obvious to anyone with a brain and more than a few second to think about it; things so obvious that they have often have existed without a patent for a while (like the podcast patent), or existed in a similar form in real life, or on a different communication device, for sometimes decades.

So, you have:
- Broken down patent office that award patents for things that shouldn't be patented
- Non practicing entity that can actually demand damage way beyond what they could actually get through licensing
- Juries/judges that cannot understand technical cases and the industry
- Courts in parts of the country with a high reputation for high damage (so much that its almost a inside joke...)

 

[darcyf]

Most of what you say makes sense. But one little fact presented here tells me everything I need to know about this plaintiff: They try as hard as they can to get and keep these cases in Tyler, Texas. A well known plaintiff friendly venue. East Texas is to plaintiff lawyers what the briar patch is to Brer Rabbit.

To be fair, that doesn't prove anything about them or their motives beyond "they want to win", which can be said of any plaintiff.

 

[Keirasplace]

Obviously there's more to this story.

So what is Apple acknowledging if it's willing to payout $4.5 million - if it's not guilt?

Get ready to payout the $500 million plus, Apple.

Or maybe it is less expensive to pay $4.5 million than litigate through the court for 5 years at a cost of 10M. They won't pay $500M, and Samsung, Google, and all others won't pay either.

 

[PinkyMacGodess]

What goes around, comes around for patent trolls and APPL has benefited from it in the past. Man up and pay the fine

That's pretty harsh.

And if Apple just paid every claim against it, they would have been broke and out of business long ago.

Apple is a magnet for these kinds of cases because they have 'a means to pay'. Notice that the wording of the suit seems to indicate that 'apps available through the iTunes store' violated the patent. Several companies were dropped. Why? 'You can't get blood from a stone'?

The patent system is broken. The patent system is used by attorneys and corporations to try to get the most out of it they can.

Perhaps they were right to sue, but Apple is within their rights to appeal. It's part of the American legal system. If an appellant court finds no grounds, and dismisses the claim and award, so be it. Smartfish can appeal that too.

But overly broad patents, and software patents in particular, are hog tying the industry.

It would be if I patented a device that caused the 'free exchange of ions through a gaseous substance', and then sued all of humanity because breathing violates my patent. OK, 'prior art' would throw my case out, unless I had a 'friendly court'...