Apple Ordered to Pay Caltech $838 Million for Infringing on WiFi Patents

[Analog Kid]

You mean most of the tax dollars tucked away in Ireland. Yeah got it.

Obviously I mean the dollars not tucked away in Ireland... The ones in Ireland aren't lost, they're tucked away. But like I said, the policy isn't specific to Apple, it's the policy for all business whether they have elaborate tax avoidance schemes or not.

The point is that the goverment isn't investing it's own money. It doesn't have money. It invests tax revenues on behalf of the citizens. It doesn't lose while companies do not-- companies lose because the government does. And that's how research works-- win some, lose most.

 

[konqerror]

I guess I’m not sure the point you were trying to make... The points I was making in the part you quoted were that the cost of running the University doesn’t change so if it’s not paid for with royalties it will have to be paid somehow and the argument that Caltech is a “rich kids school” or Apple is a wealthy company doesn’t really bear on the general policy debate.

You missed my earlier post which explained that commercial patent royalties are considered unrestricted funds and are used to pay for stuff that the government finds unallowable to pay with taxpayer money.

That's the fundamental difference with private schools who sit on big endowments (also unrestricted funds).

In general, with any company or organization accepting taxpayer dollars, money must be obtained and spent for the purposes it is designated for. That is, tuition expenses are paid with tuition dollars, research expenses are paid with research dollars. If the university cannot pay for all tuition expenses, they can't reach into the research pot, they have to up the tuition.

To give an example of how extreme this separation is, where I went to school there were several locations by cafes where they put two differently styled outdoor trash cans next to each other. One trash can was emptied by people from campus foodservice, which is considered an unrestricted, auxiliary organization, and the other trash can was a general campus trash, which can be paid out of restricted taxpayer funds. Technically, it was illegal to throw cafe trash in the campus trash can.

 

[apple supporter]

First, what I find interesting in some of these cases is Apple is purchasing parts from outside suppliers, so I get confused how the consumer of that supply gets dinged for patient violation. Wouldn't this be similar to say Ford having bought a stereo speaker from a supplier from Company X, then Ford gets sued for sound distribution from A to B, because Company X did not secure an unknown and bizarre patient from University Troll Z?

Second, in technology second as a mobile phone, someone should do an article on how many potential patents such a device supposedly incorporates. I suspect it is at least in the thousands. How is it sustainable to allow every troll to win huge sums of money?

Third, do other countries have such litigious environments as American?

Finally, you can be an Apple hater or an Samsung hater, but all these frivolous lawsuits cause companies to charge a higher cost to the consumer (i.e., us) to pay for these outrageous fines, legal fees, licensing fees, etc. Your hatred should be focused more on the trolls affecting you more directly.
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P.S. for the tax-whiners, tell me when filing your taxes do you not want to save money paid in tax? If your friend told you to do X, Y, and Z--you could save $1000 and it would be legal by the letter of the law. All business and individuals are going to look for ways to reduce their tax burden. This practice is not unique to Apple nor illegal. Apple, as well as other multinationals, is utilizing the laws on the books to legitimately and legally reduce its tax burden--probably to help fund some of its previous lawsuits.

 

[wigby]

I can understand a for-profit entity going after patent violations, but educational institutions should be donating their work to the world for the greater good, I think. What's the motive behind this? Schools are not in the business of profiting from patents, are they?

It's not their core business but they filed a patent and the court upheld it. It wouldn't make any sense for them to file a patent in the first place if they were planning on giving all of their research away so that others could make billions instead of protecting their own investments and inventions.

 

[Winni]

Yes think about it. How awesome would it be to install iOS on a Samsung or other $200 phones.
But i guess Apple wouldn’t sell 1/10th of its iphones anymore.

So u see what patents are for...

Actually, that is what COPYRIGHT laws are for -- this has nothing to do with patents.

 

[AxiomaticRubric]

I’m glad Caltech won this round, because it may (indirectly) benefit JPL and space exploration.

 

[konqerror]

I’m glad Caltech won this round, because it may (indirectly) benefit JPL and space exploration.

Nah. Caltech doesn't fund JPL, but rather the opposite. Caltech gets some money as a "profit" for administering JPL for NASA.

Major rule of government work: it is strictly illegal to give anything to the government for free.

I visited a friend at another major FFRDC, and he had to come up with a government contract to charge a visitor's fee to.

 

[BC2009]

This is wrong. The purpose of patents and the USPTO is to protect the inventors right to monetize their invention while publicLy sharing the knowledge with the world to promote further innovation. Anytime an entity uses a patent for sole purpose of suing somebody else who leveraged the invention then the whole purpose of why patents exist in the USA backfires. Rather than promoting innovation you are stifling it and nobody is benefiting from the invention unless somebody is willing to pay the toll to the troll.

It is even worse when the patent troll is a university or college. These entities are suppose to promote free knowledge sharing and collaboration with other institutions by publishing papers (not filing patents) to put innovations in the public domain.

Shame on Caltech.

 

[Filero]

Apple steals the customers. Apple steals startups. Apple steals companies. Apple steals research centers. Thats the ethics of...

 

[lilkwarrior]

Yes, they are. In US, schools need to make money to fund their research and since a lot of companies use their research without paying for it, schools are turning into patent trolls to get some funding.

Tuition isn't enough to pay for all of the advanced tech stuff that they use and even tuition is too expensive.

I agree with you that state-funded school research should be automatically in the public domain but that's not it works in USA.

In my opinion, patent trolls should not be allowed to file a lawsuit after 5 years and these type of patents should be automatically expired after 10 years. Software patents should be banned.

1000% concur software patents should be banned.

 

[Agit21]

Damn Apple steals a lot It seems.

 

[nexusrule]

I can understand a for-profit entity going after patent violations, but educational institutions should be donating their work to the world for the greater good, I think. What's the motive behind this? Schools are not in the business of profiting from patents, are they?

well in USA universities need to profit to stay alive so...

 

[kis]

You infringe numerous patents every day in all likelihood. For many patents, one has merely to use an infringing product to infringe. Doesn’t mean we are bad people.

Lol - so Apple is just good, doesn't matter what they steal, whether they are found guilty of tax evasion etc - is that what you're saying? And Samsung is always bad, right?
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This is wrong. The purpose of patents and the USPTO is to protect the inventors right to monetize their invention while publicLy sharing the knowledge with the world to promote further innovation. Anytime an entity uses a patent for sole purpose of suing somebody else who leveraged the invention then the whole purpose of why patents exist in the USA backfires. Rather than promoting innovation you are stifling it and nobody is benefiting from the invention unless somebody is willing to pay the toll to the troll.

It is even worse when the patent troll is a university or college. These entities are suppose to promote free knowledge sharing and collaboration with other institutions by publishing papers (not filing patents) to put innovations in the public domain.

Shame on Caltech.

Apple stole, apple evaded taxes. But yeah, let's blame Caltech for defending the right of ownership to something they worked on? So if I go to your house, steal all your family photos and anything else you created that would be ok, too? I mean come on: you're not really making good use of most of those photos - they're just somewhere in a drawer.

 

[V_Man]

Lol - so Apple is just good, doesn't matter what they steal, whether they are found guilty of tax evasion etc - is that what you're saying? And Samsung is always bad, right?
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Apple stole, apple evaded taxes. But yeah, let's blame Caltech for defending the right of ownership to something they worked on? So if I go to your house, steal all your family photos and anything else you created that would be ok, too? I mean come on: you're not really making good use of most of those photos - they're just somewhere in a drawer.

Thats not what he said.

 

[Codpeace]

No, there were no copyright infringement rulings against Apple this month.

A question for you and/or any of the other lawyers here, if you don’t mind:

The main article made this statement: “Apple claimed that because Caltech didn't file the lawsuit until 2016, six years after the 802.11n wireless standard was published, the time limit to collect damages had expired.”

This is mysterious to me — is it a laches argument? That would be weird, to me, in that laches is an equitable concept that doesn’t seem applicable in the patent-infringement context. But maybe it is... Or is it related to F/RAND principles?

Thanks. I value your comments on technical legalities concerning tech.

 

[iPadified]

Giving companies IPR is regarded as state funding. Therefore, in EU, we at Universities must patent. Believe me, it's boring and you seldom earn any money at all. Caltech would likely pump these funding into buildings, research equipment etc and possibly have reduced state funding for awhile. No private jets in sight...

 

[DaRev]

hmm...that’ would be smart; China would no longer need to steal or infringe would they..or anyone else for that matter?

Except Chinese companies that belong to the IEEE/WIFI Consortium already get access to all these technologies, it is only American Companies using 3rd party chips that are being sued retroactively for this. This patent was filed 6 years after Apple started using the 802.11N in their phones.

Samsung and others will probably get sued next.

 

[Stoke]

Just send them their 17k Mac Pros, get it over with.

 

[kis]

Thats not what he said.

That was absolutely what he was implying

 

[zubikov]

Caltech should probably forget about Apple's campus recruiting for a while.

 

[cmaier]

A question for you and/or any of the other lawyers here, if you don’t mind:

The main article made this statement: “Apple claimed that because Caltech didn't file the lawsuit until 2016, six years after the 802.11n wireless standard was published, the time limit to collect damages had expired.”

This is mysterious to me — is it a laches argument? That would be weird, to me, in that laches is an equitable concept that doesn’t seem applicable in the patent-infringement context. But maybe it is... Or is it related to F/RAND principles?

Thanks. I value your comments on technical legalities concerning tech.

I can’t comment on this particular case.

As a general issue, there is a six-year statute of limitations in patent cases, and equitable principles also do apply, though in 2017 the Supreme Court said that laches doesn’t apply within the time period of the statute of limitations (but it may apply outside the statute of limitations. And other equitable principles (waiver, equitable estoppel) also may apply.
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That was absolutely what he was implying

No, that’s not what i was implying. What I was implying is that you cannot necessarily deduce anything about a person or entity‘s morality simply from the fact that they may have infringed a patent. Just like you may commit the tort of trespass by crossing an invisible property line you don’t know about, so, too, can you infringe a patent you don’t even know about. Which is exactly why I pointed out that you, me, and everybody else on here has likely infringed numerous patents without even knowing about them.

I said nothing about any supposed tax evasion, or any other conspiratorial theory you mentioned.

 

[nylonsteel]

i luv caltech but $838 lawsuit...ugh

 

[Gasu E.]

And you hit right upon another issue. Tuition and research grants, because they come from taxpayer dollars, are considered restricted funds. You have to use them for their intended purpose, and there's a list of things you can't buy like alcohol, dorms for athletes, president's salary above a certain threshold.

Commercial patent royalties are considered unrestricted funds, along with endowment and donation money. They are used for a whole slew of things that restricted funds cannot be used for like stadiums, swanky donor parties with tons of wine, renovations to the president's free housing, $55 million settlements for research fraud, etc.

This is why Caltech is so motivated to go after this. It's a huge amount of cash for the toys they can't otherwise buy.

What you say is substantially true, although obviously biased. I would point out a couple of things:
1. I doubt Caltech spends a lot on "stadiums"; if it's anything like my alma mater, MIT, it spends a lot on practical athletic facilities intended to keep its geek populace fit and relatively sociable.
2. Again, if it's like MIT, a huge portion of these royalties (at MIT, I think it was 30%) goes to the actual inventors. This is unlike private corporations, which typically give inventors a small cash bonus and 0% of royalties.
3. Swanky donor parties do happen; but to be clear, these are intended to raise money from donors, and are therefore effectively self-funding.
4. Can't argue with the president's house, but there is something to be said for having the president living right on campus. It's part of the pay package. Are college president's overpaid? Probably, just like US corporate executives in general. The argument is that you are competing for talent from some elite pool; you can buy into that story, or not.
5. You did not mention one of the most important uses for unrestricted funds, which is student financial aid. The group of elite universities that includes Caltech share a common policy of need-blind admission, and that no student will be unable to attend due to financial need. That money has to come from somewhere; and although there are targeted scholarship funds, those fall far short of the need gap.
6. Referring back to a previous point in the discussion, 40-50 years ago, universities made squat on their patents. But, on the other hand, the federal government was HUGELY generous with student financial aid, as well as other educational grants. As direct government sources have dried up, universities have had to fill the gaps from other sources, such as aggressive management of their patent portfolios. It's a bit sad, as this change in funding sources tends to work better for elite research universities rather than schools that are more focused solely on undergraduate education.

 

[recoil80]

How does a judge decide how much a patent is worth?
Caltech states that it is worth $1.4, but is it a fair price? Did Caltech ask for that and Apple said no or they infringed the patent and lately Caltech asked for money?
It isn't clear reading the articles about the news, I guess Caltech deserves some money for their work, but $838 millions seems like a lot

 

[oneMadRssn]

Are you serious?
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Ummm well there was that 300 million dollar verdict they upheld against Apple last January. A 140 million dollar verdict against Sprint a few months before.

Guess they didn’t get your memo.

Need more specifics.

The $300million one, are you referring to VerinetX? Because they won way more than $300M at first - over $600M actually, which was reduced by the CAFC in several different up and down remands.

I don't see any $140M verdict against Sprint. I see Sprint was awarded $140 from Time Warner Cable, which I agree the CAFC did not overturn. But that's on the low end of things. Apple won over $1B in this action - there is snowballs chance in hell that survives.
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How does a judge decide how much a patent is worth?
Caltech states that it is worth $1.4, but is it a fair price? Did Caltech ask for that and Apple said no or they infringed the patent and lately Caltech asked for money?
It isn't clear reading the articles about the news, I guess Caltech deserves some money for their work, but $838 millions seems like a lot

First, a jury decides it at first. Both Apple and Caltech put up experts on patent valuation that presented their reports and analysis on value. It's a very complicated analysis, but basically they look at the smallest saleable component that actually practices the patent, determine its value, and determine what percent of that component is actually responsible for the patented technology. They also compare it to similar patent licenses that Apple has entered into. So, if all of the infringement is in chip X, chip X does 2 things where 1 of those things is the patented technology, chip X can be purchased on the market for $0.50, and there is one chip X in each iPhone, then Apple owes $0.25 for each iPhone they've sold since the patent issued. But it comes out that Apple pays a license fee to another third-party of $0.20 per iPhone for the other thing that chip X does, then the amount would be adjusted down from $0.25 and closer to $0.20 to account for that similar license.

This is, of course, a huge simplification. It's never this straight forward, and getting the information takes input from economists and engineers and licensing experts.