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Multi-touch patent settlement with Elan costs Apple $5 million

post #1 of 23
Thread Starter 
Apple has reached a settlement in a multi-touch patent infringement suit with Elan Microelectronics Corp., in which the iPhone maker will pay out $5 million.

Taiwan-based Elan will also share patents with Apple as part of the settlement, Reuters reported on Thursday. The settlement stems from a lawsuit filed by Elan against Apple in 2009, accusing the company of violating two patents related to multi-touch input, and Apple counter-sued the same year.

Apple's relatively small payout for a company with billions of dollars in cash reserves comes months after the U.S. International Trade Commission ruled that Apple did not infringe on an Elan patent. Elan had accused Apple of "knowingly and deliberately" infringing on its technology for products like the iPhone, trackpads and the Magic Mouse.

Elan Microelectronics was founded in 1994 and builds integrated circuits used on touchpads. Its products include "eFinger," which allows for multi-finger input with handwriting recognition.

The $5 million settlement means Apple has one less lawsuit on its docket in an industry filled with patent infringement claims among device makers. Notable companies involved in patent infringement litigation with Apple include Samsung, HTC, Motorola and Kodak.
post #2 of 23
I'm sorry, so why did Apple pay them if they weren't infringing?

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply
post #3 of 23
Why isn't Elan suing every other manufacturer that makes multitouch smartphones and tablets?
post #4 of 23
Quote:
Originally Posted by Tallest Skil View Post

I'm sorry, so why did Apple pay them if they weren't infringing?

Lots of times people and companies settle because it is cheaper than defending oneself. Lawyers = money.

$5 million is a rounding error for Apple.
post #5 of 23
Quote:
Originally Posted by simtub View Post

Why isn't Elan suing every other manufacturer that makes multitouch smartphones and tablets?

Because the other guys aren't the ones making money.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply
post #6 of 23
Quote:
Originally Posted by Tallest Skil View Post

I'm sorry, so why did Apple pay them if they weren't infringing?

The ITC's opinion was that they weren't infringing. Elan had also filed a companion suit in Federal Court making much the same claim. Apple might have lost that one, so settled rather than take a chance.

At least Apple doesn't have to steal Elan's IP anymore.

/s
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post #7 of 23
Maybe Elan's patents cover also TVs and Apple's don't...
post #8 of 23
Quote:
Originally Posted by OriginalG View Post

Maybe Elan's patents cover also TVs and Apple's don't...

A multi-touch television really?

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply
post #9 of 23
Quote:
Originally Posted by Tallest Skil View Post

I'm sorry, so why did Apple pay them if they weren't infringing?

They weren't infringing an a patent, but Elan were suing them for infringing on two patents?

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post #10 of 23
Quote:
Originally Posted by Crowley View Post

They weren't infringing an a patent, but Elan were suing them for infringing on two patents?

See Post 6.

Elan had filed both an ITC complaint asking for an injunction and a Federal suit claiming infringement and damages.
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post #11 of 23
Quote:
Originally Posted by Tallest Skil View Post

I'm sorry, so why did Apple pay them if they weren't infringing?

The battle was not over after ITC's initial ruling. $5M is cheaper than keeping the dispute going.

Quote:
Originally Posted by simtub View Post

Why isn't Elan suing every other manufacturer that makes multitouch smartphones and tablets?

It's a common strategy to go over one party first. If you win the first battle, then the other parties are more likely to pay up. Some companies go after the weakest *infringer* first. Some go after the largest.
post #12 of 23
Quote:
Originally Posted by Tallest Skil View Post

A… multi-touch television… really?

Personally, I think a Siri-based TV is almost as silly. It's sad that we are only capable of applying today's infatuations to imagine tomorrow's wonders.
post #13 of 23
Quote:
Originally Posted by simtub View Post

Why isn't Elan suing every other manufacturer that makes multitouch smartphones and tablets?

Maybe they are, but this site isn't called EveryOtherManufacturerInsider.
post #14 of 23
Quote:
Originally Posted by Tallest Skil View Post

I'm sorry, so why did Apple pay them if they weren't infringing?

Elan initiated two actions. First, one in federal court, and one with the ITC. The federal court proceeding is slow, but really is more equipped to decide patent claims. The ITC is a quick procedure, but is pretty conservative when deciding infringing behavior. The ITC can't determine damages. It can only issue an injunction preventing infringing product from coming into the US.

Parties hope they get a favorable ITC decision to force a favorable settlement because parties can't risk having their products banned from the Country. In this case, the ITC ruled against ELAN. So, ELAN didn't have any leverage against Apple to force a quick settlement. That federal court might have still ruled in Elan's favor, but Elan would have to pay the lawyer fees. Rather than paying for retracted litigation, Apple settled for probably what it would pay the lawyers for fighting about it.
post #15 of 23
The patent:

http://www.google.com/patents/about/...d=IAkYAAAAEBAJ

Looks pretty solid and dates back to Logitech in the late 1990's.
post #16 of 23
This is the big takeaway, more so than the $5M IMHO:

Reuters: "The statement said the two companies would also exchange authorizations to use each other's (multi-touch) patents."

So now both Nokia and Elan have finagled Apple into sharing IP with them as part of an infringement claim settlement. I figure it's just a matter of time before similar settlements are made with Samsung, Motorola and others.
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post #17 of 23
Quote:
Originally Posted by Gatorguy View Post

This is the big takeaway, more so than the $5M IMHO:

Reuters: "The statement said the two companies would also exchange authorizations to use each other's (multi-touch) patents."

So now both Nokia and Elan have finagled Apple into sharing IP with them as part of an infringement claim settlement. I figure it's just a matter of time before similar settlements are made with Samsung, Motorola and others.

Motorola and other, maybe. Samsung, not so much.
post #18 of 23
Quote:
Originally Posted by stelligent View Post

Personally, I think a Siri-based TV is almost as silly. It's sad that we are only capable of applying today's infatuations to imagine tomorrow's wonders.

This will be one quote I will check back on in a year or so if Apple release such a thing. If they do, you realize very other tv maker will rush to the Google inferior copy so they can shout me too! If not you were right.
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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post #19 of 23
Quote:
Originally Posted by Tallest Skil View Post

I'm sorry, so why did Apple pay them if they weren't infringing?

because it's likely apple was infringing, but not on the scale elan initially claimed

the patent is for using multitouch, including gestures, for mouse and mouse button emulation

if you read the patent, it's clear that the multitouch macbook/air/pro and the magic mouse are likely to be infringing

but apple could argue that iphone/ipad are not emulating a mouse, even if it might look like they are, so elan would find it tough to win a claim that these devices infringe on the rather narrowly drawn patent, for the same reason it's hard to see how elan would have a strong claim against other smartphone/tablet makers

imho apple knew it was likely to lose on the macbook/magic mouse, so it did the sensible thing and struck a deal for cash plus some cross-licensing

likewise, elan accepted it wasn't likely to win on the iphone/ipad, so it did the sensible thing, took a nice chunk of cash plus some handy cross-licensing, and will just carry on with it's business, which is making stuff like touchpads and touchscreens, not being a patent troll

all quite refreshing really
post #20 of 23
Quote:
Originally Posted by Gatorguy View Post

This is the big takeaway, more so than the $5M IMHO:

Reuters: "The statement said the two companies would also exchange authorizations to use each other's (multi-touch) patents."

I think the $5M was Apple paying for the sharing of Elan patents. Apple did not infringe, but they wanted in on Elan's patent portfolio.
post #21 of 23
Quote:
Originally Posted by Tallest Skil View Post

I'm sorry, so why did Apple pay them if they weren't infringing?

the ITC said Apple wasn't infringing but Elan took it to the courts. Sometimes it's just cheaper to pay than play. And given that Apple will make back that $5 Million before today is out, its not really a big deal

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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post #22 of 23
Quote:
Originally Posted by Steven N. View Post

The patent:

http://www.google.com/patents/about/...d=IAkYAAAAEBAJ

Looks pretty solid and dates back to Logitech in the late 1990's.

Thank you very much.
post #23 of 23
Quote:
Originally Posted by simtub View Post

Why isn't Elan suing every other manufacturer that makes multitouch smartphones and tablets?

Because all the other manufacturers licensed it.
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