Fresh off $533M victory, Smartflash files another patent suit against Apple

Posted:
in General Discussion edited June 2015
Just one day after Smartflash won a $533 million jury decision against Apple, the intellectual property holder filed yet another patent case against the company seeking even more damages for alleged infringement.




Smartflash Technologies' new complaint, filed in U.S. District Court in Texas on Wednesday, alleges that Apple's iTunes Store, App Store and iAds advertising network infringe on a number of patents it owns, all of which are entitled "Data Storage and Access Systems." They are: Unsurprisingly, the complaint was filed in the same district as the previous, successful suit, in Tyler, Tex. Patent infringement suits are frequently filed in the Eastern District of Texas because of their historically favorable outcomes toward intellectual property holders, who are frequently derided as "patent trolls" for seeking money from patent infringement suits.

Smartflash had its latest complaint ready to go immediately, as the new suit already cites the Feb. 24 decision, in which Apple was ordered to pay $533 million for infringing on gaming patents. Apple has already said it will appeal that decision, and in a statement to Bloomberg the company indicated it plans to push back hard.

"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," a spokeswoman said. "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 up this fight through the court system."

Smartflash was founded by inventor Patrick Racz in the early 2000s as a way to market and commoditize his patents, some of which date back to 1999. As a non-practicing entity, the firm operates solely through patent licensing and litigation. Using its clutch of seven patents, all attributed to co-inventor Racz, the firm sued game makers Game Circus and KingsIsle Entertainment in 2014. Both companies settled out of court.

Court documents, both in the previous suit and this week's new complaint, allege that around the time of Smartflash's founding, Racz met with executives from what is now Gemalto SA to market technology relating to the patents-in-suit. Among those who gained knowledge of the patented tech was Augustin Farrugia, who left Gemalto in 2002 and subsequently took a position as Apple's senior director of Internet service security and DRM technologies.

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Comments

  • Reply 1 of 81
    "Some men just want to watch the world burn."
  • Reply 2 of 81

    Patent trolls suck.  Godspeed with the appeal, Apple.  Please shut these schmucks down.

  • Reply 3 of 81
    America, the land of opportunists!
  • Reply 4 of 81

    America, the land of opportunists! 

  • Reply 5 of 81
    How far can executive action stretch now that we have a king at the throne?
  • Reply 6 of 81
    Quote:

    Originally Posted by David Garon View Post



    America, the land of opportunists!

     

     

    Quote:

    Originally Posted by RedHotFuzz View Post

     

    Patent trolls suck.  Godspeed with the appeal, Apple.  Please shut these schmucks down.


     

     

    Quote:

    Originally Posted by Suddenly Newton View Post



    "Some men just want to watch the world burn."



    I'll go against the trend here and say, it seems like this guy deserves to win. If this guy got these patents, then the USA say he deserves them. If these patents are infringed by Apple, then Apple must not win only because, like Microsoft a few years back, it has the finances to shut people up (and be a gangster? or was that a Korean company?).

     

    As to whether the patent system should allow patenting software or DNA (that's coming, we all know it)... that's another issue. For now, it does, Apple is a HUGE owner of patents and uses them against smaller companies. You can't have the benefits without the costs.

     

    Also, the concept of DNA printer where you code stuff in a standard programming language is an obvious idea I've had since I know about DNA. I'm betting whatever you want that the first firm to market a solution for this will try to patent the idea, and sue whoever brings an equivalent solution to market.

  • Reply 7 of 81
    slurpyslurpy Posts: 5,119member

    "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,"

     

    Pretty much sums it up. Can't fucking understand how these asswipes can claim damages when they sell zero products. The iPhone, etc. did not sway a single dollar away from them, cause they sell jack shit. Apple should countersue, since the negative PR of this trial had an effect on the stock and therefore billions in marketcap. Cockroaches. 

  • Reply 8 of 81
    Quote:
    Originally Posted by Slurpy View Post

     

    "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,"

     

    Pretty much sums it up. Can't fucking understand how these asswipes can claim damages when they sell zero products. The iPhone, etc. did not sway a single dollar away from them, cause they sell jack shit. Apple should countersue, since the negative PR of this trial had an effect on the stock and therefore billions in marketcap. Cockroaches. 




    Saying this is pretending that the concept of a pure research lab is worthless. it's essentially limiting the right to enterprise to people who have enough capital to operate an Industry Model, e.g. "products, employees, jobs, US presence". 

     

    It's quite obvious why this would be detrimental to the USA in the long (or even medium) run. If this was grounds for companies to automatically win, you would witness instant brain drain to Europe or Canada. However, it's unlikely to happen, because this is not "the truth", it's just "Apple's PR", which they are perfectly entitled to do in a free country like America. (Note it is not even a lawyer, but "a spokesperson for the company" who expressed this statement.)

  • Reply 9 of 81
    rob53rob53 Posts: 2,011member
    Show me a product. Show me where his patented ideas were actually used. How generalized are his patents? Apple should go after the USPTO directly and challenge them to justify giving this guy patents just for ideas that he never tried translating into a product.
  • Reply 10 of 81
    Looks like a nuisance lawsuit that is winning vs Apple as the courthouse is in the same smallish town as the patent holders. Tyler Texas I'm sure wants that money in their town and like most judges in Texas, there is probably corruption involved as well. I'm sure Apple will fight this vigorously and try to get it out of Tyler, Texas, but it's a nasty little nuisance for sure.
  • Reply 11 of 81
    jfc1138jfc1138 Posts: 3,090member

    Appeals have been out of Tyler Texas (appeals courts being more centralized) and they have drastically cut the awards when not rejecting the initial ruling outright.

  • Reply 12 of 81
    Quote:

    Originally Posted by BJNflicks View Post



     like most judges in Texas, there is probably corruption involved as well.

    FTFY.

  • Reply 13 of 81
    Hmmmm.... how much would it have cost Apple to BUY all the patents belonging to Smartflash before all this happened?

    Smartflash is literally a bunch of patents... no employees, factories or other assets.
  • Reply 14 of 81
    dasanman69dasanman69 Posts: 12,979member
    rob53 wrote: »
    Show me a product. Show me where his patented ideas were actually used. How generalized are his patents? Apple should go after the USPTO directly and challenge them to justify giving this guy patents just for ideas that he never tried translating into a product.

    Sometimes a patented a part of something bigger. The guy that invented intermittent wipers wasn't going to start a car company just to build cars with intermittent wipers on them, nor even build a factory unless he had customers lined up. Since he was basically a nobody in the car manufacturing industry his idea was used without his permission, and he successfully sued Ford. It doesn't get more nonpracticing entity than him.
  • Reply 15 of 81
    thrangthrang Posts: 764member
    I don't know patent law, but the patents posted here seems so broad that they would lay claim to almost any transaction conducted on a connected device. They read more like a laundry list of wish list ideas, not a designed/engineered structured process.

    I could write a detailed patent about how develop specialized hardware to land on Mars, quite detailed, referencing systems and process that work perfectly in my head - but that doesn't mean I've invented a damn thing.

    Further, I would think Apple has its own parents for technology they've legitimately performed R&D, engineered, tested, and deployed.
  • Reply 16 of 81
    The lunacy for this company is that Apple will ultimately win and burn their existence out of the landscape. They've opened themselves up to all their patents being reviewed in Appeals.
  • Reply 17 of 81

    I disagree with Apple's statement.  At some point the patent was purchased from someone who either didn't have the funds or stamina to release a product.  Just because they purchased a patent does not mean it's OK to use the idea without payment.  They can just give them a IOU from Samsung.

  • Reply 18 of 81
    cpsrocpsro Posts: 2,452member

    From browsing the oldest cited patent, #7334720, which was filed rather recently (2006), a three-pronged defense can be imagined: (1) obviousness rejection of the patent; (2) rejection due to prior art; and (3) the claims describe a common method of doing business, with the difference being it's "done on a computer", which is insufficient for receiving patent protection.

    However, the problem here is Texas.

  • Reply 19 of 81
    rob53rob53 Posts: 2,011member
    rob bonner wrote: »
    I disagree with Apple's statement.  At some point the patent was purchased from someone who either didn't have the funds or stamina to release a product.  Just because they purchased a patent does not mean it's OK to use the idea without payment.  They can just give them a IOU from Samsung.

    The 7 patents are owned by the guy who patented them. They weren't bought but until I see something other than some drawings that prove his ideas even work I feel they should be invalidated. 15 years and all he has are his ideas.
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