Apple's ongoing legal battle with Smartflash involving iTunes technology likely over

Posted:
in General Discussion edited April 13
The legal saga of Apple and its battle with technology holding company Smartflash took another turn in Apple's favor this week




The U.S. Court of Appeals for the Federal Circuit this week upheld an earlier ruling by the Patent Trial and Appeal Board, in Apple's long-running battle with a company that critics describe as a patent troll. The appellate court found that seven patents held by Smartflash were invalid, because they were abstract concepts rather than actual inventions.

The five-year-long Smartflash saga is now likely over.

The History of Smartflash

Smartflash got its start as a company established in the 1990s that produced an early, pre-iPod digital music player. The company's product failed by the early 2000s, but the company remained alive as a patent-holding concern, based on what's described on Smartflash's website as "Data Storage and Access Systems technology the essence of the innovation lay in the inventive digital memory system which was configured and designed so as to permit for the first time, inter alia, the secure and controlled receipt, storage, retrieval, use and transmission of digital data that offered a range of functionality which included, but was not limited to, digital rights management (DRM) and payment facilities."

In short, Smartflash claimed that iTunes and the iTunes music store owed its existence to Smartflash.

Patrick Racz, the U.K.-based founder, describes himself as a visionary, but he has been also criticized as a patent troll given that the parent company exists only for licensing and has not products to speak of.

Apple vs. Smartflash

In 2013, Racz established a new company in Eastern Texas- the patent litigation capital of the U.S.- and filed a lawsuit against Apple, claiming that Apple had violated his data storage patents with its iTunes product. Part of the argument was that Racz had once met with a team from Gemalto SA, and that a member of that team, Augustin Farrugia, later joined Apple as senior director of Internet service security and DRM technologies.

In February 2015, a court sided with Rocz, handing Smartflash a $533 million verdict; Racz then sued Apple again, while also filing similar lawsuits against Amazon, Google and Samsung.

However, the reward was tossed by a judge in July 2015, citing possibly tainted jury instructions. In 2016, the U.S. Patent and Trademark Office issued a pair of rulings finding that three of the patents at issue were invalid. Then, in March of 2017, a three-judge panel on the U.S. Court of Appeals tossed the verdict completely, once again finding the patents too "abstract."

The U.S. Supreme Court in January declined to hear a challenge from Smartflash to the March ruling, according to the legal site Lexology,

The ruling this week came from the Court of Appeals, but upheld the findings of the patent board. As a result, Google and Samsung are off the hook as well.

What's next?

Smartflash could theoretically appeal to the Supreme Court again, but the court has already refused to hear the case once.

In the meantime, Apple's trouble with probable patent trolls are far from over. The company was sued this week by a company called First Face, which claims that Apple's Touch ID technology violates its patents.

Comments

  • Reply 1 of 14
    wood1208wood1208 Posts: 1,522member
    Hope there is a mechanism where court order smartass to pay all the trial related expenses to Apple.
    magman1979viclauyycwatto_cobrajony0
  • Reply 2 of 14
    Well done USPTO.  By screwing up the original grant of these patents nearly two decades ago, you allowed untold millions of dollars in pointless litigation to be wasted.  Maybe someday in the distant future when/if Washington magically fixes itself, the whole system will be rebooted and digital IP policy will be rational or at least predictable.
    longpathmagman1979anton zuykovh2pwatto_cobrabaconstangStrangeDaysjony0
  • Reply 3 of 14
    wood1208 said:
    Hope there is a mechanism where court order smartass to pay all the trial related expenses to Apple.
    Apple can ask the court to order the plaintiff to pay for their court costs. They may likely use it as a stick to use in case this idiot decides to appeal. 
    longpathmagman1979racerhomie3watto_cobrajony0
  • Reply 4 of 14
    Well done USPTO.  By screwing up the original grant of these patents nearly two decades ago, you allowed untold millions of dollars in pointless litigation to be wasted.  Maybe someday in the distant future when/if Washington magically fixes itself, the whole system will be rebooted and digital IP policy will be rational or at least predictable.
    Rational and predictable are 2 words that do not exist in Washington. Erratic and unbelievable are more likely. 
    magman1979watto_cobra
  • Reply 5 of 14
    What the hell is wrong with this Eastern Texas Court?

    watto_cobra
  • Reply 6 of 14
    Glad it’s over. Ah yes. 
    watto_cobra
  • Reply 7 of 14
    wood1208 said:
    Hope there is a mechanism where court order smartass to pay all the trial related expenses to Apple.
    Apple can ask the court to order the plaintiff to pay for their court costs. They may likely use it as a stick to use in case this idiot decides to appeal. 
    Big mistake. That should be done immediately following the decision. They knew what they were doing with those toy patents of theirs. Yes, they lost some patents, but so what? They can buy more patents from someone else (thanks to the PO that approves "idea" patents every day because they are under-qualified) and try that again.
    edited April 13
  • Reply 8 of 14
    h2ph2p Posts: 260member
    Wait years for iPhone (or iTunes etc) to exist and to sell... building (fake) equity so that you are awarded over half a billion dollars in “damages.” Wow. We see that technique used in many of these IP suits. 
    watto_cobra
  • Reply 9 of 14
    farmboyfarmboy Posts: 152member
    h2p said:
    Wait years for iPhone (or iTunes etc) to exist and to sell... building (fake) equity so that you are awarded over half a billion dollars in “damages.” Wow. We see that technique used in many of these IP suits. 
    Unfortunately, until someone sells something, it's going to be difficult to get damages because there aren't any. 
    h2p
  • Reply 10 of 14
    wizard69wizard69 Posts: 12,536member
    wood1208 said:
    Hope there is a mechanism where court order smartass to pay all the trial related expenses to Apple.
    Apple can ask the court to order the plaintiff to pay for their court costs. They may likely use it as a stick to use in case this idiot decides to appeal. 
    Big mistake. That should be done immediately following the decision. They knew what they were doing with those toy patents of theirs. Yes, they lost some patents, but so what? They can buy more patents from someone else (thanks to the PO that approves "idea" patents every day because they are under-qualified) and try that again.
    You do realize that patents are all about ideas right.  You don't pull a valid patent out if your behind.  You need an idea, an invention, to get a valid patent.  In this case it appears that the ideas expressed where not specific enough to warrant a patent.  

    On top of all of this you cant really call these guys patent trolls if their original business was wiped by Apples iPod.  What you might say is that they didn't patent their invention well enough to hold off Apple.  

    From my perspective the courts and the patent office worked as one would expect them too.  Sure it cost Apple a little time and money but this is hardly an example of a hard core patent troll.  

    I suspect that much if the negativity expressed wih regards to these law suits come from people that have never worked in R&D and seen years of work go down the drain due to being on the loosing end of a legal action.  
    h2p
  • Reply 11 of 14
    jdb8167jdb8167 Posts: 105member
    What the hell is wrong with this Eastern Texas Court?

    Simple corruption. The juries are made up of locals who benefit from the troll companies that set up shop there. They reward these companies with large verdicts. The whole idea of a specialized court for patent litigation was inevitably going to lead to this.
    watto_cobra
  • Reply 12 of 14
    h2ph2p Posts: 260member
    farmboy said:
    h2p said:
    Wait years for iPhone (or iTunes etc) to exist and to sell... building (fake) equity so that you are awarded over half a billion dollars in “damages.” Wow. We see that technique used in many of these IP suits. 
    Unfortunately, until someone sells something, it's going to be difficult to get damages because there aren't any. 
    Very good point. I object to waiting years and years to file suit. 
    watto_cobra
  • Reply 13 of 14
    Well done USPTO.  By screwing up the original grant of these patents nearly two decades ago, you allowed untold millions of dollars in pointless litigation to be wasted.  Maybe someday in the distant future when/if Washington magically fixes itself, the whole system will be rebooted and digital IP policy will be rational or at least predictable.

    Don't be silly!  That money wasn't wasted, it went into the pockets of poor, overworked and underappreciated lawyers! 
    randominternetperson
  • Reply 14 of 14
    Well done USPTO.  By screwing up the original grant of these patents nearly two decades ago, you allowed untold millions of dollars in pointless litigation to be wasted.  Maybe someday in the distant future when/if Washington magically fixes itself, the whole system will be rebooted and digital IP policy will be rational or at least predictable.

    Don't be silly!  That money wasn't wasted, it went into the pockets of poor, overworked and underappreciated lawyers! 
    I've read that intellectual property law is the highest paid field of law lately.  This makes sense for two reasons: 1. to be an IP lawyer you have to be a technologist as well as a lawyer, and 2. who the heck would do it if didn't pay a ton?  I can't imagine how boring and frustrating it must be to dive deep into these patents day after day, especially with millions and billions and dollars at risk.
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