Apple Must Pay $532.9M in iTunes Patent-Infringement Verdict
Texas-based Smartflash LLC alleged in its lawsuit that Apple had infringed on three of the company's data storage and payments systems patents in Apple's iTunes music software.Apple has been ordered by a federal jury in Texas to pay $852.9 million to Smartflash LLC to compensate the company for infringing on several Smartflash patents in Apple's iTunes music software. The verdict was issued by a federal court jury in Tyler, Texas, on Feb. 24, which rejected Apple's arguments that it did not infringe on Smartflash's patents, according to a report by BloombergBusiness. Smartflash alleged in its lawsuit that Apple violated its patents in three ways in iTunes relating to digital rights management and inventions related to data storage and managing access through payment systems, BloombergBusiness reported. "Smartflash claimed that iTunes used the inventions in applications such as Game Circus LLC's Coin Dozer and 4 Pics 1 Movie." Smartflash originally sought $852 million in damages, based on a percentage of Apple's sales of devices that were used to access iTunes, while Apple said that any infringement was only worth about $4.5 million, the story said.
Many critics of U.S. patent laws have been balking for years about companies that simply buy up patents and then go after other companies seeking damages for patent infringement, even though the suing companies didn't make the technology they are suing over. These so-called "patent trolls" have been the subject of lots of discussions and criticism for years in the United States.
In the Smartflash case, the lawsuit was filed in federal court in the Eastern District of Texas because the region "has become known as a hotbed for patent lawsuits and a favorite jurisdiction for lawyers pursuing patent claims," according to a Feb. 25 article by the Associated Press.
In the Smartflash case against Apple, the jury "agreed with Smartflash's argument that Apple used software based on ideas patented by inventor and Smartflash executive Peter Racz, without permission," according to the AP. "The Texas firm alleged that in 2000, Racz met to discuss his ideas with prominent software designer Augustin Farrugia, who was then working for a European company but later joined Apple to work on security programs for its iTunes store."Like other major technology companies, Apple is often mired in patent-infringement cases, as a plaintiff and as a defendant. In 2012, Apple won a $1.05 billion patent-infringement verdict from Samsung that was later lowered and then appealed by Samsung, according to earlier eWEEK reports. That lawsuit involved infringements of features used in Samsung's Galaxy smartphones.