Judge Drops Apple's $533M Fine in iTunes-Related Lawsuit, Sets New Damages Trial

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The U.S. District Court for the Eastern District of Texas on Tuesday voided $532.9 million in damages awarded to patent licensing firm Smartflash LLC in February in an iTunes-related patent lawsuit, per Reuters.

The report claims federal judge Rodney Gilstrap has set a new damages trial on September 14 after ruling that "his jury instructions might have 'skewed' jurors' understanding of the damages that Apple should pay."

Apple was initially ordered to pay $532.9 million in damages to Smartflash LLC after a federal jury in the Tyler, Texas courtroom found certain iTunes apps to be infringing upon the company's patents related to digital rights management, data storage and managing access through payment systems.

Apple countered that Smartflash LLC was exploiting the patent system to collect royalties.
"Smartflash makes no products, has no employees, creates no jobs, has no U.S. presence, and is exploiting our patent system to seek royalties for technology Apple invented," said Kristin Huguet, an Apple spokeswoman. "We refused to pay off this company for the ideas our employees spent years innovating and unfortunately we have been left with no choice but to take this fight up through the court system."
Smartflash LLC was originally seeking $852 million in damages, and claimed it was entitled to a percentage of sales of Apple products used to access iTunes, such as iPhones, iPads and Macs. Apple argued that $4.5 million was fair at most, claiming it does not infringe upon any of Smartflash LLC's inventions and that its patents are invalid.

Apple likely still faces a fine of a different amount pending the results of the new damages trial scheduled for September, but the iPhone maker plans to appeal the decision.

Article Link: Judge Drops Apple's $533M Fine in iTunes-Related Lawsuit, Sets New Damages Trial
 

Dilster3k

macrumors 6502a
Jul 20, 2014
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Off-topic: I'm sorry but that new icon just doesn't blend in nicely with my dock...
It looks nice, but doesn't quite fit in next to the App Store & iBooks icons.
 
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ineedamac

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Complete crap. How can you hold patents when you do not make any products that use any of those patents?
 

bbeagle

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Oct 19, 2010
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Judge Rodney Gilstrap giving faulty jury instructions. This is such a surprise.:rolleyes: He needs to get off his ass and deal with the Newegg issue. Damn near two years and he's still dragging his feet.
There must be some method to his madness.

Judge Gilstrap ruled in favor of TQP for 2.3 million. However, if he doesn't submit the ruling, TQP doesn't get paid, and NewEgg doesn't owe them any money. NewEgg can't appeal as there is no ruling submitted - yet they don't have to pay either, because there is no ruling submitted.

Maybe this was Judge Gilstrap's way of making sure NewEgg doesn't pay? I don't know. There HAS to be more to this story.
 

roland.g

macrumors 604
Apr 11, 2005
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Off-topic: I'm sorry but that new icon just doesn't blend in nicely with my dock...
It looks nice, but doesn't quite fit in next to the App Store & iBooks icons.
That's odd. My icon changed on my iPhone but not on my Mac. Still the flat red circle. Hmm.
 

duffman9000

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Sep 7, 2003
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Deep in the Depths of CA
There must be some method to his madness.

Judge Gilstrap ruled in favor of TQP for 2.3 million. However, if he doesn't submit the ruling, TQP doesn't get paid, and NewEgg doesn't owe them any money. NewEgg can't appeal as there is no ruling submitted - yet they don't have to pay either, because there is no ruling submitted.

Maybe this was Judge Gilstrap's way of making sure NewEgg doesn't pay? I don't know. There HAS to be more to this story.
No method to his idiocy. NewEgg had to set aside the money to cover the award. Money that could be used elsewhere.
 
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Gasu E.

macrumors 601
Mar 20, 2004
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There must be some method to his madness.

Judge Gilstrap ruled in favor of TQP for 2.3 million. However, if he doesn't submit the ruling, TQP doesn't get paid, and NewEgg doesn't owe them any money. NewEgg can't appeal as there is no ruling submitted - yet they don't have to pay either, because there is no ruling submitted.

Maybe this was Judge Gilstrap's way of making sure NewEgg doesn't pay? I don't know. There HAS to be more to this story.
No, because NewEgg has to hold the $2.3 M in escrow. That's a significant expense, which they could be using more productively. If it sat in escrow "forever", it would be the same to Newegg as actually paying it. The longer it sits in escrow, the more it resembles an actual payment from a business standpoint.
 
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Orlandoech

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Jun 2, 2011
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OH EM GEEE.. Apple could never do wrong, this is just DUMB... pathetic "patent trolls" just wanting a handout. :rollseyes:

Apple does wrong
Patent trolls exist
Both do wrong
Get over it

This judge is an idiot too.
 
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bbeagle

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No method to his idiocy. NewEgg had to set aside the money to cover the award. Money that could be used elsewhere.
There really HAS to be more to it than that.

For example, Judge Gilstrap illegally took NewEgg's money they set aside and gambled it away.... and is trying to put it back before he gets caught.
No, because NewEgg has to hold the $2.3 M in escrow. That's a significant expense, which they could be using more productively. If it sat in escrow "forever", it would be the same to Newegg as actually paying it. The longer it sits in escrow, the more it resembles an actual payment from a business standpoint.
Okay - I get that part. And NewEgg can only use that money AFTER a successful appeal, and they can't appeal yet, because the initial case isn't technically over yet.

But there's got to be some other reason we will find out about later. Like, Judge Gilstrap has a grudge against somebody at NewEgg, one of the lawyers is his ex-wife, he stole part of the escrow to gamble with, lost it, and is trying to put it back before filing. Maybe he is trying to hurt TQP by not allowing this ruling to affect other rulings, so TQP will lose another ruling? SOMETHING.

I know Intuit successfully fought against TQP and won back in July 2014, so that ruling can be used to invalidate this eventual ruling. Maybe there is another court case to invalidate this one??? I hope we'll find out more soon.
 

Mascots

macrumors 68000
Sep 5, 2009
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Complete crap. How can you hold patents when you do not make any products that use any of those patents?
Not only to allow the Average Joe to protect work that he does not have the resources to produce, but also to allow those ideas to be used by others with fair compensation to Joe.

However, we've seen this aspect abused a lot recently because of poor transition of the patent system into the programming world and its loose accountability of what actually can get, and in what gets patented.
 
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bbeagle

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OH EM GEEE.. Apple could never do wrong, this is just DUMB... pathetic "patent trolls" just wanting a handout. :rollseyes:

Apple does wrong
Patent trolls exist
Both do wrong
Get over it

This judge is an idiot too.
Apple also does a lot right
Maybe you shouldn't label every Apple fan as someone who says Apple does no wrong.
Less than 1% of the zealots here think Apple is God.
A lot more people here think Apple is the anti-christ than think they are God.
Get over it
 

immunezone8

macrumors newbie
Jul 7, 2015
11
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patents are stubborn issues.
apple knows that, so time to reach deep and apple pay :)
I actually think the judge was very lenient.
 

LordVic

macrumors 603
Sep 7, 2011
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OH EM GEEE.. Apple could never do wrong, this is just DUMB... pathetic "patent trolls" just wanting a handout. :rollseyes:

Apple does wrong
Patent trolls exist
Both do wrong
Get over it

This judge is an idiot too.
probably the most fair assessment

Apple knows patents exist. they use them extensively and knows the rules. But chose to ignore these patents and violate them anyways

yes, This company is likely nothing but a patent troll. But, according to the law and the legal ramifications, they do still own the patents and they do still have legal rights to it.

So yeah, Both are acting like petulant children and both are acting "evil" in this regard.

and now you have a judge who apparently can't even give jury instructions right.

this is embarrassing for the texas judicial system, apple and whoever this company thats suing them is.
 

immunezone8

macrumors newbie
Jul 7, 2015
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Or MOST companies. Almost EVERY company holds many patents they don't use. That's the nature of the beast.

Microsoft and Google hold far more patents than Apple - why aren't you singling them out like you are with Apple?
Well this story happens to be about apple.
 
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blahblah100

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Sep 10, 2009
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Or MOST companies. Almost EVERY company holds many patents they don't use. That's the nature of the beast.

Microsoft and Google hold far more patents than Apple - why aren't you singling them out like you are with Apple?
Perhaps because this article is about Apple and this is an Apple focused site.
 

Saucesome2000

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Dec 10, 2014
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No, because NewEgg has to hold the $2.3 M in escrow. That's a significant expense, which they could be using more productively. If it sat in escrow "forever", it would be the same to Newegg as actually paying it. The longer it sits in escrow, the more it resembles an actual payment from a business standpoint.
I'm not an expert, but wouldn't most companies like NewEgg have money set aside for issues such as this which has already been allocated as an operating expense?
 

neuropsychguy

macrumors 65816
Sep 29, 2008
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Or MOST companies. Almost EVERY company holds many patents they don't use. That's the nature of the beast.

Microsoft and Google hold far more patents than Apple - why aren't you singling them out like you are with Apple?
You could have added that at least Microsoft, Google, and Apple do something other than just hold patents. Yes, they aren't actively producing products for some of their patents but neither are they just patent holding companies. While there are legitimate companies that just hold patents and don't produce anything (many affiliated with universities), Smartflash LLC looks like a patent troll. Smartflash might not be one (here's a fairly balanced article from earlier this year about the lawsuit: http://arstechnica.com/tech-policy/2015/02/company-without-a-product-wins-533m-verdict-vs-apple-says-its-no-patent-troll/) but really does look like one.