Apple has been ordered to pay US$532.9 million (about RM1.9 Billion) to Smartflash LLC, a holding company that does nothing but sue others for infringing its patents. In this case, the ruling came after a Texan Jury found that Apple’s iTunes infringes patents concerning digital rights management and data storage.
Issues of patent trolls have plague the US judicial system as small companies are set up to acquire patents for the sole purpose of suing multinational conglomerates for hundreds of millions of dollars. Apple has traditionally been successful at fending off these frivolous claims, but it appears that the jury in this trial were not impressed by arguments that Smartflash’s suit was invalid, filed too late, and that the royalty claims were “excessive and unsupportable”.
Smartflash had originally asked for $852 million (about RM3 billion), which it claimed represented a percentage of all Apple products sold since iTunes infringed its patents. The claim was based on the fact that an Apple executive was given a briefing on the patents at some point in the past. Smartflash had set up an office right in front of the Texas courthouse, which some take as an indication that it had always intended to survive purely on suing other people.
The patent troll is also in the midst of suing Samsung, Google, and Amazon for infringing various other patents. The litigation against these three other companies is at various stages, with Google trying to get the proceedings transferred back to its home state of California.
Apple intends to appeal the decision, with Spokesperson Kristin Huguet saying, “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. 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.”