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Boston University patent suit over Apple's iPhone 5 could net $75M

post #1 of 52
Thread Starter 
Apple's iPhone is at the center of another patent dispute, as the Trustees of Boston University have filed suit against the Cupertino company, alleging that not only the iPhone 5 but also the iPad and MacBook Air infringe on a BU professor's patent.

738


At issue in the suit is U.S. Patent No. 5,686,738, covering a method of "highly insulating monocrystalline gallium nitride thin films." Theodor D. Moustakas, Ph.D., a BU professor of Electrical and Computer Engineering, is listed as the inventor of the '738 patent, and the University as the assignee owns the right, title, and interest to the patent.

The process in the patent is related to the production of semiconductor devices using silicon, sapphire, gallium aresenide, magnesium oxide, zinc oxide, and silicon carbide. Gallium nitride thin films, a product of the process, are desirable in electronics due to their being a source of inexpensive and compact solid-state blue lasers.

The plaintiffs claim that Apple's iPhone 5, iPad, and MacBook Air "include a gallium nitride thin film semiconductor device" of the type described in the '738 patent. The suit alleges that Apple "has infringed, and continues to infringe, one or more claims of the '738 patent."

BU's case would seem to be bolstered by the fact that at least one other company pays a licensing fee to use the component in question, the Boston Herald reported on Wednesday. The University will likely raise that issue in court.

Boston University has also filed identical claims against eight other smaller manufacturers, as well as claims against both Samsung and Amazon in the past year. Observers note that the payout from the Apple suit could top out around $75 million if the University can demonstrate that Moustakas intended to make a business out of his invention.

The University's suit calls for Apple to detail all "gains, profits, and advantages" stemming from its use of the '738 patent, as well as awarded damages to compensate for the infringement. The suit also calls for the court to permanently enjoin Apple from making and selling any of the infringing products.

In its filing, Boston University asks the court for a trial by jury on all matters suitable for trial by jury. The case, Civil Action No. 1:13-cv-11575, was filed on July 2 in the U.S. District Court for the District of Massachusetts. F. Dennis Saylor is the presiding judge.

post #2 of 52
damn I am sick of patent suits.
post #3 of 52
If they aren't using the patent personally, then the patent should be public domain.
post #4 of 52
Is this the same type of professors that were listed to courses I took, but never showed up because they were too busy writing patents, working on projects, writing books, or whatever and the good money I paid for was for a course delivered by some professor's teachers aide?!

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post #5 of 52
This one seems serious. An institution like BU -- and its Board of Trustees -- would not remotely take something like this on as a trolling exercise. If patents have been infringed, Apple should pay, and move on. $75M is chump change (for Apple).
post #6 of 52
Quote:
Originally Posted by Rot'nApple View Post

Is this the same type of professors that were listed to courses I took, but never showed up because they were too busy writing patents, working on projects, writing books, or whatever and the good money I paid for was for a course delivered by some professor's teachers aide?!

This would not happen in any of the universities with which I have been associated. Where did you go to school?
post #7 of 52
Maybe Apple's sofa cushions will get put back crooked. But maybe not. It's too soon to panic.
post #8 of 52
Does Apple manufacture the component in question or just buy it to use. Seems like whoever makes it should be the target.
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post #9 of 52
Quote:
Originally Posted by BradPro View Post

If they aren't using the patent personally, then the patent should be public domain.

You mean... should the professor fabricate chips for himself using that technology?

post #10 of 52
In the end it could turn out that Apple is at zero fault because

1. BU is mistaken over the issue of what method is being used to produce for Apple products and it is not THEIR method

2. BU is mistaken that they weren't paid for their patent as it was done under a patent exhaustion deal with a third party supplier who then sold to Apple. Since Apple rarely talks about exactly who does what for their stuff this wouldn't be a shocking mistake

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post #11 of 52
Quote:
Originally Posted by Robin Huber View Post

Does Apple manufacture the component in question or just buy it to use. Seems like whoever makes it should be the target.

Buyers are legally required to insure that all legal license for use of the item is covered and if not to set up appropriate deals

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post #12 of 52
Quote:
Originally Posted by BradPro View Post

If they aren't using the patent personally, then the patent should be public domain.

Take a look at the guy that invented intermittent windshield wipers. Should that guy have started a car company in order for his patent to be valid?
post #13 of 52

If the method described in this patent doesn't meet the definition of "obvious" I don't know what would.  How else would you make a solid state blue laser?  /s

 

I wouldn't want to be on a jury for this case.

post #14 of 52
Quote:
Originally Posted by Robin Huber View Post

Does Apple manufacture the component in question or just buy it to use. Seems like whoever makes it should be the target.

Why? They took orders from Apple to build it. The due diligence is on Apple not them.
post #15 of 52
Quote:
Originally Posted by BradPro View Post

If they aren't using the patent personally, then the patent should be public domain.

There are some companies that they only hold and license patents and that's their business.  The problem I see is that if a company wants to develop a product, they have to perform a very exhaustive patent search before they can do anything, which may impede new product development.

 

I think what happens is that if Apple knows about an existing patent, they either try to work around the patent, try to license it, or in some cases use it anyway and deal with it later.

 

But a lot of times they may not even know an existing patent exists because they don't have enough attorneys performing patent searches, unless Apple wants to submit their own patent.

 

I wonder where this one ends up as.

 

1.  Apple didn't know about the patent.

2.  Apple knew but designed around it.

3.  Tried to license it, but the patent owner didn't want to license it, or they wanted way too much.

4.  Apple knew about the patent, ignored it and used it anyway.

 

or some other scenario that I'm not aware of.

post #16 of 52

From the patent, it appears this patent would be used in the production of a semiconductor chip, maybe a light emitting diode. I couldn't find any web articles mentioning how this technology would even be used. If it is indeed a single component on an iPhone, iPad or MacBook Air, someone would have had to take these apart and checked every single component. I don't believe BU manufactures anything using this technology so I wonder how they figured out someone else did. I also wonder whether this is a new component being used by Apple since they don't talk about previous iPhone versions. One has to wonder if common resistors and transistors have been patented and whether the original "inventor" will start suing about these.

post #17 of 52

I have a problem with this case that has nothing to do with patent trolling (they're real) or whether it's valid, or whether it's being infringed.

 

My problem is that academic patents like this were almost certainly developed using grant money from the federal government, or based directly on research that was funded by the government -- i.e., with public funds. I don't think that patents should be allowed if the patent is closely based on work funded by public money.

post #18 of 52
Quote:
Originally Posted by BradPro View Post

If they aren't using the patent personally, then the patent should be public domain.


Since when?

post #19 of 52
Quote:
Originally Posted by WisdomSeed View Post

damn I am sick of patent suits.


Which ones? Apple or everyone else

post #20 of 52
Quote:
Originally Posted by charlituna View Post


Buyers are legally required to insure that all legal license for use of the item is covered and if not to set up appropriate deals

 

Right, and do you check to verify that all the components both hardware and software in the products you bought have been properly licensed and make arrangements to pay otherwise? Or is this only limited to those who make products that are directly sold to consumers? or is the supplier of the chips not a seller and Apple a buyer? what about the suppliers Apple's suppliers? have you checked that the gallium arsenide is mined from duly licensed mining operations in countries that have a positive human rights record, etc, etc, etc.

 

Quote:
Originally Posted by Soloman View Post


Why? They took orders from Apple to build it. The due diligence is on Apple not them.

 

Why would it be on Apple? Perhaps if the company suppling to Apple is only doing so under a strict license to use a process and materials explicitly detailed by and provide through Apple sources then why would it not be on the plant actually producing the chips using equipment and or procedures covered by patents to ensure that the have paid for whatever license or right to use there may be?

 

 

It sounds to me like someone may have decided that their patent is being used by an awful lot of low level suppliers and the profit margins are very thin - when those components end up in very high profit margin end user products and they want to see a percentage of the retail price of the finished product rather than a percentage of the wholesale price of a component of that product, but I could be wrong. 

post #21 of 52
Quote:
Originally Posted by andrzejls View Post


Since when?

They are just commenting on how they THINK it should be, that's all.

post #22 of 52
The law should change. Apple shouldn't be the target of something they use instead of make. If they can sue use, then what is to stop a lawsuit against an end user for buying a product. It is the same thing. This is basically double dipping.

It would be better if they could only sue the component maker. I think in an ideal world, Apple could directly license to avoid a ban on the component, but they should be immune from being sued because someone else infringed on a patent. That allows for two licensing models where the component maker is responsible in either case.

I think they at least should have the legal requirement to sue the component maker first. If they win that suit, the can then sue Apple after Apple has had a reasonable amount of time to comply with the settlement or new licensing terms.

Basically it would be nice if IP theft at least worked the same as physical theft. Under the current IP law, it would be like someone stole a brand new TV from a store and then sold it. Then the person who unknowingly bought the stolen TV would be charged with theft. That just doesn't make sense. Just like for physical theft, I think there should be a reasonable suspicion that something was stolen to be sued or charged.
Edited by esummers - 7/3/13 at 10:02am
post #23 of 52
Quote:
Originally Posted by charlituna View Post


Buyers are legally required to insure that all legal license for use of the item is covered and if not to set up appropriate deals

 

How so? If I go buy a part, I have to make sure all licenses are paid for? That is hardly the case. If I buy processors from Fry's to build computers for clients, why would I have to know anything about the patents involved? If I buy from the manufacturer, again, why would it? 

post #24 of 52
Quote:
Originally Posted by esummers View Post

The law should change. Apple shouldn't be the target of something they use instead of make. If they can sue use, then what is to stop a lawsuit against an end user for buying a product. It is the same thing.

It's not the same thing. Just like the lawsuit against Ford by the guy that invented intermittent windshield wipers. Ford probably contracted out the production of the windshield wipers assembly for use in their cars. Why should the manufacturer be responsible for the patent search?
post #25 of 52
Quote:
Originally Posted by Soloman View Post


Why? They took orders from Apple to build it. The due diligence is on Apple not them.

 

 

How do you know? Many times a manufacturing supply company offers a product for sale. For instance, a type of RAM memory. A company buying that product should be able to assume the product is free of IP issues. Under your theory, I should be libel to Boston University for buying products from Apple using the allegedly infringing IP. Am I supposed to go investigate all the IP in a manufacturer's product before I buy it? That would be silly. 

 

Moreover, it is impossible to investigate whether a product you want to build is completely free of licensing issues. Patents are purposefully made vague. Further, the reality is we do not know enough to determine who should be libel (if anybody). It is possible Apple is idemnified. 

post #26 of 52
Quote:
Originally Posted by WisdomSeed View Post

damn I am sick of patent suits.

Communists got sick of real property rights and got rid of them.  Do you realize that 80% of the value of the S&P 500 is in intellectual property?  I'm always dumbfounded by the lack of understanding how much intellectual property raises the standard of living in the U.S.  

You could always go live in Africa or the middle east.  No IP rights there.  Saudi Arabia has issued like 300 patents in the past 20 years.  Very little risk of being sickened by a patent infringement suit there.  

post #27 of 52
Quote:
Originally Posted by TBell View Post


How do you know? Many times a manufacturing supply company offers a product for sale. For instance, a type of RAM memory. A company buying that product should be able to assume the product is free of IP issues. Under your theory, I should be libel to Boston University for buying products from Apple using the allegedly infringing IP. Am I supposed to go investigate all the IP in a manufacturer's product before I buy it? That would be silly. 

Moreover, it is impossible to investigate whether a product you want to build is completely free of licensing issues. Patents are purposefully made vague. Further, the reality is we do not know enough to determine who should be libel (if anybody). It is possible Apple is idemnified. 

Do you really think Apple is using 'off the shelf' parts?
post #28 of 52
Quote:
Originally Posted by Soloman View Post


It's not the same thing. Just like the lawsuit against Ford by the guy that invented intermittent windshield wipers. Ford probably contracted out the production of the windshield wipers assembly for use in their cars. Why should the manufacturer be responsible for the patent search?

 

Different things.  It would be closer if Ford was sued for the type of metal or rubber the windshield wipers were made of instead of the design.  That should be in the realm of the manufacturer.  It is true this case isn't as clear cut, but similar lawsuits often happen with the manufacturer both designs and fabricates the chip.  In that case there should be no question it is the manufacturer.  Either way, they should only be allowed to sue one company in the chain for infringement or it is double dipping.  Perhaps it is for the courts to decide which company was the one infringing, but the manufacturer certainly could be the infringing party.

 

To put it another way.  Lets say a vendor told you they could paint your product.  You should have a reasonable expectation that they own any patents for the painting process they will be using.


Edited by esummers - 7/3/13 at 10:16am
post #29 of 52
Quote:
Originally Posted by anantksundaram View Post

This one seems serious. An institution like BU -- and its Board of Trustees -- would not remotely take something like this on as a trolling exercise. If patents have been infringed, Apple should pay, and move on. $75M is chump change (for Apple).

Why should Apple treat BU any differently than anyone else?  

This looks like trolling to me (under the definition most people give to trolling).  This patent is from 1997.  Its no coincidence the lawsuit just fired up now.  The patent expires in like 1.5 years.

Universities never put up money for patent litigation. My bet is that someone found this patent and an investment group is funding the litigation for a piece of the action. 

Don't get me wrong, I don't think there is anything wrong with trolling.  Patent owners have the right to enforce their patents and should get what they can out of them.  But Apple should aggressively defend this. If you ask me, $75M is outrageous for a 20 year old III-V semiconductor processing patent.  Apple should offer $2M and settle for $5. 


Edited by ash471 - 7/3/13 at 10:38am
post #30 of 52
Quote:
Originally Posted by ash471 View Post

Why should Apple treat BU any differently than anyone else?  

This looks like trolling to me.  This patent is from 1997.  Its no coincidence the lawsuit just fired up now.  The patent expires in like 1.5 years.

Universities never put up money for patent litigation. My bet is that someone found this patent and an investment group is funding the litigation for a piece of the action. 

Don't get me wrong, I don't think there is anything wrong with trolling.  Patent owners have the right to enforce their patents and should get what they can out of them.  But Apple should aggressively defend this. If you ask me, $75M is outrageous for a 20 year old III-V semiconductor processing patent.  Apple should offer $2M and settle for $5. 

I think I have my own definition of patent trolling (If I think it is wrong, it is trolling).  I think the patent is legitimate regardless of how old it is, so it may not be trolling for that reason.  I just think they are either suing the wrong party or double dipping on licensing.  I would consider those actions trolling.

post #31 of 52

The universities are finally teaching their students the future of making money

“What would I do? I’d shut Apple down and give the money back to the shareholders”

Michael Dell - 1997

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“What would I do? I’d shut Apple down and give the money back to the shareholders”

Michael Dell - 1997

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post #32 of 52
Quote:
Originally Posted by Soloman View Post


Take a look at the guy that invented intermittent windshield wipers. Should that guy have started a car company in order for his patent to be valid?

NICE.  That is the most succinct way I've ever seen someone illustrate the problem with requiring making a product.

 

Intellectual Property rights are as fundamental to our country as real property rights.  We don't tell land owners what to do with their property.  Intellectual property owners should be free to do whatever the hell they want with their property.  That's why this country was founded on property rights.  The government guarantees the ownership and the individual exploits the right.  It has worked quite well for more than 200 years and it continues to work just fine.

.

TO ALL YOU PATENT HATERS: GO LIVE IN SOME OTHER COUNTRY.  

post #33 of 52
Quote:
Originally Posted by esummers View Post

I think I have my own definition of patent trolling (If I think it is wrong, it is trolling).  I think the patent is legitimate regardless of how old it is, so it may not be trolling for that reason.  I just think they are either suing the wrong party or double dipping on licensing.  I would consider those actions trolling.

I don't know if BU is trolling.  However, pulling out a 20 year old patent just before its about to expire is a classic technique used by "trolls." 

 

Just to clarify, when I was saying tolling, I was referring to what most people think is trolling.  My definition of trolling is very different and very very limited.  Trolling is when someone enforces a patent that they know is invalid or not infringed and they sue hundreds or thousands of defendants and settle for an amount that is too small to make it worth challenging the patent (usually in the $10,000-$100,000 range).  These people are bastards.

 

It is somewhat difficult to say whether someone is trolling unless you spend the time and money to investigate. People often use the term trolling when they have no clue what true trolling is or whether what someone is doing it.  The term has become a nice short hand way to disparage almost all patent litigants.  


Edited by ash471 - 7/3/13 at 10:54am
post #34 of 52
Quote:
Originally Posted by andrzejls View Post


And what you wold say to the patent for a "rectangular shape with rounded corners"?. I bet that the next patent will be for the circle, right?

Agree with your argument.  However, I just want to point out that the iPad shape patents are stronger patents than people like to admit.  Importantly, they were design patents, not utility patents.  The problem is that most people don't really understand design patents.  Do you realize that the entire patent is just a drawing (usually 7 figures, six elevational views and one perspective view).  A design application protects the aesthetic appearance, not function.  In fact the classic blunder in a design application is to try and claim a functional feature.

  

Apple got beat up over its design applications, but I think it was unjustified and mostly the result of ignorance on the part of the media and lay public. 

post #35 of 52

Apple ought to counter-sue for fraud and defamation.  The manufacturer(s) of the components that use this film is (are) the legitimate target(s) of the infringement suit.  Clearly, BU is going after the deep pockets and a company that is sure to generate a lot of media attention.  This kind of abuse of the court system ought to be punished severely.

 

Unless it can be shown that Apple instructed the manufacturers to use this film, then it is not their fault if their suppliers did the infringing.

post #36 of 52
Quote:
Originally Posted by TBell View Post

 

 

How do you know? Many times a manufacturing supply company offers a product for sale. For instance, a type of RAM memory. A company buying that product should be able to assume the product is free of IP issues. Under your theory, I should be libel to Boston University for buying products from Apple using the allegedly infringing IP. Am I supposed to go investigate all the IP in a manufacturer's product before I buy it? That would be silly. 

 

Moreover, it is impossible to investigate whether a product you want to build is completely free of licensing issues. Patents are purposefully made vague. Further, the reality is we do not know enough to determine who should be libel (if anybody). It is possible Apple is idemnified. 

 

 

You seriously think anything at Foxconn production-wise happens without Apple's express clearance? Dream on. The color of the protective gloves the workers wear most likely had to be cleared by Tim Cook first.

 

As for your other questions, yes, that's exactly what companies are supposed to do. That's why they have legal research teams on their payroll. Though its highly unlikely they'll find all patents which their product may infringe upon. In most cases, the company who's patents are in question will go to the infringing company, and ask for a licensing fee. I say "most companies" because Apple NEVER licenses anything, whether they are actively using said patent or not. They are quite simply that greedy kid in class that hogs all the good toys and doesn't share. BU most likely did this, and Apple gave them the business version of "go piss up a rope," and hence we have a lawsuit.

 

Do I feel bad for Apple? Not in the slightest, because expensive litigation is exactly what a company that patents a wedge shape deserves. Furthermore, I'm astonished at any post that directs ill will at BU for doing exactly what Apple would do and has done over and over again in recent years in regards to protecting their patents. This is the business environment Apple chose to live in and has done it's best to foster for many years through similar patent litigation. Why should anyone be up in arms about that now simply because what they hath wrought has come back to bite them?

post #37 of 52
Btw BU is also suing Amazon and Samsung.
post #38 of 52
Quote:
Originally Posted by macFanDave View Post

Apple ought to counter-sue for fraud and defamation.  The manufacturer(s) of the components that use this film is (are) the legitimate target(s) of the infringement suit.  Clearly, BU is going after the deep pockets and a company that is sure to generate a lot of media attention.  This kind of abuse of the court system ought to be punished severely.

 

Unless it can be shown that Apple instructed the manufacturers to use this film, then it is not their fault if their suppliers did the infringing.

What? Of course they are suing someone with money.  You think they should only sue people that don't have money.  That's pretty stupid.  

BU doesn't want media attention. They want a payout.  You obviously don't know how this works.  

 

I assure you Apple won't be hiring you as legal counsel.  Apple would get slapped with rule 11 sanctions if it tried to sue for fraud or defamation.  That's the dumbest thing I've ever heard.  First, "fraud" requires an intent to deceive.  Where's the intentional deception?  Defamation requires making a false statement.  I suppose there is at least a color of an argument if Apple believes the patents are not infringed.  However, if defamation could be enforced in such a situation, it would mean that everyone that loses a lawsuit has defamed their opponent by arguing otherwise. Obviously that's not a tenable outcome. I'm sure this issue was resolved in the 1700s.   

  

post #39 of 52
Quote:
Originally Posted by Cash907 View Post

...

 

This is the business environment Apple chose to live in and has done it's best to foster for many years through similar patent litigation. Why should anyone be up in arms about that now simply because what they hath wrought has come back to bite them?

 

Do you believe that Apple sues other companies more than other companies sue Apple?

 

Do you believe that Apple is the company that first started use of the patent system against competitors?

 

Do you believe that Apple never came up with any worthy patentable ideas, which were then stolen?

 

Do you believe that it would be possible for Apple's leadership to NOT play the patent game, if everyone else is playing it? Can they realistically opt out of the current (badly messed up) system?

 

Do you believe BU has the right to pursue remedies for their own inventions? I do! That one I DO believe, and if Apple should pay up, then I hope they're required to do so! Not because of some "karma" for Apple being a force of darkness and evil. But because if the suit has merit (which none of us can say yet) then it should win.

post #40 of 52
Quote:
Originally Posted by ash471 View Post

I don't know if BU is trolling.  However, pulling out a 20 year old patent just before its about to expire is a classic technique used by "trolls." 

 

Just to clarify, when I was saying tolling, I was referring to what most people think is trolling.  My definition of trolling is very different and very very limited.  Trolling is when someone enforces a patent that they know is invalid or not infringed and they sue hundreds or thousands of defendants and settle for an amount that is too small to make it worth challenging the patent (usually in the $10,000-$100,000 range).  These people are bastards.

 

It is somewhat difficult to say whether someone is trolling unless you spend the time and money to investigate. People often use the term trolling when they have no clue what true trolling is or whether what someone is doing it.  The term has become a nice short hand way to disparage almost all patent litigants.  

 

I think anything that sounds like abuse of the patent system is what many people consider trolling.  It is probably not the right definition though.  Interpreted literally, it is probably more like your definition.  Basically creating a lawsuit against random people/companies without any actual knowledge of infringement (or use of a broad patent that could apply to practically anything) to see what sticks. 

 

I don't like to see what appears to be double dipping on licensing by legitimate patents either.  I'm not positive if that is the case here, but since they are also going after other companies, my guess is it isn't Apple designed silicon.  Particularly since it is a 20 year old patent.  They should have sued years ago if there was true infringement.  Sounds like they are trying to milk it before it expires.

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