• Apple to Pay Out $533M for Infringing Game-Related Patents

    A US federal jury in Texas recently ordered Apple to pay $532.9 million in damages after it found that the company’s iTunes digital media purchasing and distribution system was in infringement of three patents held by licensing firm, Smartflash. The complaint was originally filed in 2013, claiming that Apple’s iTunes Store, iOS and Mac App Stores and iAd, as well as other branded digital transaction services infringe on three Smartflash patents which were related to “data storage and managing access through payment systems.”

    The folks over at Bloomberg report that the jury in Tyler, Texas wasn’t persuaded by Apple’s arguments that the patents-in-suit aren’t used by iTunes or any other first-party products. Apple also didn’t succeed in invalidating Smartflash’s inventions according to the publication.

    To give some insight into the matter, Smartflash was founded by inventor, Patrick Racz in the early 2000s as a way to market and commoditize his patents. As a non-practicing entity, the firm operates solely through patent licensing and litigation. Using its several patents that are all attributed to co-inventor Racz, the firm sued several game developers such as Game Circus and KingsIsle Entertainment in 2014, both of which settled out of court. The court documents claim tat Racz met with executives from what is now Germalto SA to market technology relating to the patents-in-suit. Among those who gained knowledge of the patented technology was Augustin Farrugia who left Gemalto in 2002 and subsequently took a position as Apple’s Senior Director of Internet Security Service and DRM technologies.

    Smartflash is now seeking $852 million in damages from Apple, a portion of which was calculated as a percentage of iPhone, iPad and Mac device sales. Eric Albritton, Apple’s lawyer in the case, argued against awarding hardware royalties for a single device feature during the case. He had the following to say in court regarding the matter:

    It doesn't make a lick of sense that one person would buy an iPhone and not make calls. People do not buy cell phones for the sole purpose of using apps.
    Apple argued that the patents were worth $4.5 million at most and the royalty demands are “excessive and unsupportable.” With the case against Apple completed, Smartflash will likely use the same patents in a separate case against Samsung.

    Source: Bloomberg, Smartflash
    This article was originally published in forum thread: Apple to Pay Out $533M for Infringing Game-Related Patents started by Akshay Masand View original post
    Comments 3 Comments
    1. ruslan120's Avatar
      ruslan120 -
      The funny part is that for Apple this is a sneeze.
    1. SpiderManAPV's Avatar
      SpiderManAPV -
      Quote Originally Posted by ruslan120 View Post
      The funny part is that for Apple this is a sneeze.
      For companies of this size it becomes more about the principle of the matter more than the actual money I'm sure.
    1. edwilk55's Avatar
      edwilk55 -
      This is one case where they should bury them in legal fees by carrying this out forever! Low life scumbags!
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