US federal appeals court tosses $533M Smartflash victory against Apple

AppleInsider

A U.S. federal appeals court on Wednesday tossed a $533 million verdict in favor of patent holder Smartflash, which in an earlier court battle had argued that Apple violated its data storage concepts by way of iTunes.

A three-judge panel ruled that the Smartflash patents were too "abstract" and didn't sufficiently describe an actual invention, according to Reuters. The panel suggested that in the original court case, a Texas federal judge should simply have declared the patents invalid.

Smartflash was unlikely to achieve a positive outcome, as critical decisions since its initial victory in Feb. 2015 have gone against it.

U.S. District Judge Rodney Gilstrap ordered a damages retrial in July of that year, citing faulty jury instructions. In June 2016, some Smartflash patents were invalidated by the U.S. Patent and Trademark Office for the same reasons used in today's ruling.

Indeed the Court of Appeals for the Federal Circuit could simply have referred to the USPTO decision, but went a step further in suggesting that Gilstrap should have taken action.

Smartflash has been described as a "patent troll," asserting patents without making use of them in any commercial products. It first filed suit against Apple in May 2013, claiming that in 2000 the company's founder -- Patrick Racz -- had shared his ideas with a technologist who went on to become a senior Apple director.

boredumb

Rats!!!
I was just about to apply for a patent myself, for, "computer thingy",
so that I could start suing everybody.

Seriously though, I don't think this:  "Smartflash has been described as a "patent troll," asserting patents without making use of them in any commercial products",
is all it takes to make a patent troll...I can see where it would be aggravating to be nibbled at by a non-producing entity, but, on the other hand,
the term 'intellectual "property"' isn't accidental.  
I do think it's legitimate to own and protect a very specific idea - it's kind of the same concept as literary or musical copyrights -
but I  think sufficient specificity isn't always being required -as it certainly should be - in these cases,
when decided by non-technically oriented juries and jurists.

anome

Just wait until my patent for storing media compressed as suggestively vague tunes and/or images that float around in your head. Then I'll sue everyone for violating my patent. That and the one for binocular recording of visual images, conversion to electrical signals and storage in a bio-chemical colloid. You'll have to pay me every time you look at something!

I can't see how my plan can fail!

jdgarvin50

"I do think it's legitimate to own and protect a very specific idea " is accurate, but the fact USPT has invalidated some of their patents says they weren't specific enough while also chalking up yet another example of the need for patent reform in this country. Maybe someday we can quit asking "How'd they ever get a patent on THAT?!" while watching companies' attorney's fees decline as a result. Since attorney's fees are a cost component of every product we buy, that should be good for us as consumers!

sflocal

Go after SmartFlash with attorneys fees and for wasting everyone's time.  They should be sued into oblivion.  Trolls.

spamsandwich

Nicely done, Apple lawyers.

quinney

anome said:

Just wait until my patent for storing media compressed as suggestively vague tunes and/or images that float around in your head. Then I'll sue everyone for violating my patent. That and the one for binocular recording of visual images, conversion to electrical signals and storage in a bio-chemical colloid. You'll have to pay me every time you look at something!

I can't see how my plan can fail!

You had better monetize that first one as soon as possible.  Storing things in heads is out of fashion and declining rapidly.

jcallows

i'm guessing it was judge lucy koh who sided against apple in the first trial.  denied again!

seanismorris

I just patented the round edge cell phone...  Oops, was I to late?

How about the 1 mm (width) phone?  If you make one that width you have to pay me $$$$

anome

quinney said:

anome said:

Just wait until my patent for storing media compressed as suggestively vague tunes and/or images that float around in your head. Then I'll sue everyone for violating my patent. That and the one for binocular recording of visual images, conversion to electrical signals and storage in a bio-chemical colloid. You'll have to pay me every time you look at something!

I can't see how my plan can fail!

You had better monetize that first one as soon as possible.  Storing things in heads is out of fashion and declining rapidly.

I just need to crack the problem of storing them in someone else's head. Getting them in there is easy, it's retrieving them that's hard. All I've been able to get out so far is verbal abuse and physical violence.

radarthekat

I've grappled with the dichotomy presented by the need to protect intellectual property versus the scourge that the non-practicing entity lawsuits represent.  

Perhaps the answer is to limit the royalties that can be demanded from patents that are not being applied (non-practicing) versus those that are applied in some product or service.  This would give greater protection and rewards to those who own patents and are using the patented technology in their products, because damage from infringement is higher versus damage to a non-practicing patent holder.  If you've gone through the expense of utilizing a patented process or mechanism, then you should be compensated greater when someone infringes that patent.  But if you haven't, and therefore also haven't brought a new product or service to market that allows society to benefit from the invention, then perhaps you shouldn't receive the same compensation for infringement.

There's perhaps a bit of precedent here in the  FRAND royalty calculations for patents that are considered standards essential.  The whole notion of SEP is that there's a greater good to society to allow multiple parties to utilize an invention as part of a standard and therefore it should be affordable for all to utilize the patented invention.  Same here.  Patented inventions that are sat upon don't benefit society, so there should be incentive to get those inventions into use.  

To give time for a new patent holder to develop products and services around a patented invention, perhaps the first few years after the patent is granted, it can be exempt from the rules I'm suggesting here.  The current status quo would remain in effect.  But after, say, three years, if you haven't shown that the patent is being developed into a product or service, then licensing limitations go into effect so that the amount you may charge for your invention will be limited, ala FRAND-type pricing guidelines.  So, if you don't intend to utilize a patented invention, either accept the lower royalty rates so that others can utilize it, or sell the patent to a company that will utilize it and therefore retain full royalty and infringement power over it.

I'd be interested in comments and feedback on this suggested approach, and to hear whether an approach of this type has ever been proposed.

edited March 2017

copeland

AppleInsider said:

...
Indeed the Court of Appeals for the Federal Circuit could simply have referred to the USPTO decision, but went a step further in suggesting that Gilstrap should have taken action.
...

To my mind that is the really interesting tidbit in the story (besides this $500 million thingy  ).
Has a judge to be afraid of any consequences?

strangedays

code is speech and is already protected by copyright -- competitors can't steal your code. non-code ideas are not implementations and thus should not receive patents. software patents are thus a poor idea. 

macpro

StrangeDays said:

code is speech and is already protected by copyright -- competitors can't steal your code. non-code ideas are not implementations and thus should not receive patents. software patents are thus a poor idea. 

That makes sense to me.  If you want a patent on software make a working version of your original concept.  Not simply describe a idea in vague terms.

icoco3

radarthekat said:

I've grappled with the dichotomy presented by the need to protect intellectual property versus the scourge that the non-practicing entity lawsuits represent.  

Perhaps the answer is to limit the royalties that can be demanded from patents that are not being applied (non-practicing) versus those that are applied in some product or service.  This would give greater protection and rewards to those who own patents and are using the patented technology in their products, because damage from infringement is higher versus damage to a non-practicing patent holder.  If you've gone through the expense of utilizing a patented process or mechanism, then you should be compensated greater when someone infringes that patent.  But if you haven't, and therefore also haven't brought a new product or service to market that allows society to benefit from the invention, then perhaps you shouldn't receive the same compensation for infringement.

There's perhaps a bit of precedent here in the  FRAND royalty calculations for patents that are considered standards essential.  The whole notion of SEP is that there's a greater good to society to allow multiple parties to utilize an invention as part of a standard and therefore it should be affordable for all to utilize the patented invention.  Same here.  Patented inventions that are sat upon don't benefit society, so there should be incentive to get those inventions into use.  

To give time for a new patent holder to develop products and services around a patented invention, perhaps the first few years after the patent is granted, it can be exempt from the rules I'm suggesting here.  The current status quo would remain in effect.  But after, say, three years, if you haven't shown that the patent is being developed into a product or service, then licensing limitations go into effect so that the amount you may charge for your invention will be limited, ala FRAND-type pricing guidelines.  So, if you don't intend to utilize a patented invention, either accept the lower royalty rates so that others can utilize it, or sell the patent to a company that will utilize it and therefore retain full royalty and infringement power over it.

I'd be interested in comments and feedback on this suggested approach, and to hear whether an approach of this type has ever been proposed.

SEP's should have royalties applied to the item they are contained in.  i.e. Qualcomm should pay the royalty on the cellular radio as that is where the patent is used.  It should not be passed off to the phone maker as a percentage of the price of their product.  Also FRAND royalty calculations need to be declared up front when accepted as a SEP.  If it is a standard, the royalty should be standard.