Apple fails to invalidate Caltech patent tied to $1.1B lawsuit

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Apple's bid to invalidate a California Institute of Technology patent that lies at the heart of a $1.1 billion patent infringement verdict was quashed on Thursday, leaving the tech giant on the hook for $838 million.

iPhone Logic Board
Logic board from Apple's first iPad, released in 2010. | Source: iFixit


The U.S. Court of Appeals for the Federal Circuit affirmed a 2018 decision by the Patent Trial and Appeal Board that upheld the validity of U.S. Patent No. 7,116,710, granted to Caltech in 2006, reports Bloomberg Law. Apple in a parallel filing challenged the wireless technology patent covering data coding systems on grounds that the invention is obvious and therefore not eligible for protection under patent law.

The '710 patent was one of four Caltech properties leveraged in a 2016 lawsuit that claimed Apple and Broadcom infringed on valuable IRA/LDPC encoding and decoding technology. As it applies to Apple devices, the patents-in-suit cover chips supporting 802.11n and 802.11ac wireless technologies.

In January, a federal jury sided with Caltech and in a verdict awarded the university $1.1 billion in damages and potential royalties.

During the trial Caltech's lawyers argued a hypothetical licensing deal in 2010 for chips used in iPhone, iPad, Mac, Apple Watch and other products would have brought in some $1.40 per device from Apple and 26 cents each from Broadcom. That calculation was adopted by the jury to level an $838 million fine for Apple and accompanying $270 million fine for Broadcom.

Apple tried to counter the claims by saying it used common Wi-Fi chips supplied by Broadcom, suggesting it was not responsible for the development of encoding and decoding solutions that might infringe on Caltech's IP.

Both companies plan to appeal the ruling.

Comments

  • Reply 1 of 16
    SpamSandwichSpamSandwich Posts: 33,407member
    Apple is not being very smart with their legal team recently.
    chemengin1
  • Reply 2 of 16
    iqatedoiqatedo Posts: 1,823member
    So, did Broadcom infringe the patent and leave its customer on the hook? If so, aren't all of Broadcom's Wi-Fi chip customers targets too? Did Apple perhaps contribute to the coding algorithms for its purposes?
  • Reply 3 of 16
    rob53rob53 Posts: 3,251member
    I went to the USPTo website referenced in this story and did a search for wire(less). Nothing came up. This is a very abstract patent and I have to wonder how it even applies to wireless technology in such a way that anyone could even verify that Apple and Broadcom are using it. Here's the abstract. I doubt any jury has the faintest idea what any of this means.

    "A serial concatenated coder includes an outer coder and an inner coder. The outer coder irregularly repeats bits in a data block according to a degree profile and scrambles the repeated bits. The scrambled and repeated bits are input to an inner coder, which has a rate substantially close to one."


  • Reply 4 of 16
    DAalsethDAalseth Posts: 2,783member
    Apple is not being very smart with their legal team recently.
    They have had a string of bad luck recently. 
    I'm hoping on appeal they reassess the damages. The technology would not have been licensed to Apple. It would have been licensed to Broadcom. Unless as @Iqatedo said above Apple and Broadcom developed the chip together. In that case they're s***w*d.
    iqatedo
  • Reply 5 of 16
    gatorguygatorguy Posts: 24,213member
    iqatedo said:
    So, did Broadcom infringe the patent and leave its customer on the hook? If so, aren't all of Broadcom's Wi-Fi chip customers targets too? Did Apple perhaps contribute to the coding algorithms for its purposes?
    Both Apple and Broadcom stated in court filings that the claims against Apple are “based solely on the incorporation of allegedly infringing chips” in Apple products. 
    Unfortunately for Apple as the defendant that's the way patent law works. 
  • Reply 6 of 16
    wonkothesanewonkothesane Posts: 1,724member
    Apple is not being very smart with their legal team recently.
    Is this how it works - that the smarter „team“ wins? Maybe it’s simply that they infringed the law and the one who were not so smart were those responsible for screening the patent landscape when they decided to use the technology? 

    Being no law expert one thing that strikes me as odd is that it would appear as a customer you need to understand if there are any patents involved for a supplied part and potentially cough up license fees. I would think that such matters should be fully handled on supplier level. 
  • Reply 7 of 16
    Rayz2016Rayz2016 Posts: 6,957member
    Apple is not being very smart with their legal team recently.
    Is this how it works - that the smarter „team“ wins? Maybe it’s simply that they infringed the law and the one who were not so smart were those responsible for screening the patent landscape when they decided to use the technology? 


    That's exactly how it works, and in my obviously uninformed opinion, Apple's legal team seems to chalk up more losses than wins, and when they do win, their opponent gets a slap on the wrist and carries on doing what landed them in court in the first place.
    flyingdp
  • Reply 8 of 16
    EsquireCatsEsquireCats Posts: 1,268member
    I am all for companies licensing technology fairly - but how is technology going to move forward if every new standard is filled with multi-year, billion dollar liability traps. FRAND currently means little and there is no protection whatsoever for technology companies to reasonably vet their products against possible infringement. There are thousands upon thousands of patentable inventions, each “essential” to the standard. We can’t run around awarding a billion dollars for each of them - that’s more than the retail
    cost of every device combined. 

    I am also rather tired of the nonsense argument that it’s IP and it’s always been this way - take this to the logical extension: Apple could never produce another device and become *more* profitable by just turning into an R&D lawsuit machine, then reinvesting those funds into further patent development and aggregation. It would be utterly formidable and completely legal and “ok”.

    flyingdploquitur
  • Reply 9 of 16
    bulk001bulk001 Posts: 764member
    Apple is not having a string of bad luck recently. You cannot take other’s work and use it without paying. Where does Apple get its legal advice? The comments section of this forum? “Well some guy said he searched for wirel(ess) and nothing showed up and he said it is pretty abstract ... and some other guy said it would win on appeal ... so we’re okay to do it then.” 😅
    chemengin1
  • Reply 10 of 16
    carnegiecarnegie Posts: 1,078member
    Apple is not being very smart with their legal team recently.
    I think it's likely that it's moreso Broadcom leading the legal defense in this case. Broadcom is likely on the hook for all the damages.  Though Apple probably has a contractual obligation to assist with the defense. It probably can't, e.g., just settle the case or refuse to provide information or witnesses which might help the defense.
    FileMakerFeller
  • Reply 11 of 16
    carnegiecarnegie Posts: 1,078member

    iqatedo said:
    So, did Broadcom infringe the patent and leave its customer on the hook? If so, aren't all of Broadcom's Wi-Fi chip customers targets too? Did Apple perhaps contribute to the coding algorithms for its purposes?
    gatorguy said:
    iqatedo said:
    So, did Broadcom infringe the patent and leave its customer on the hook? If so, aren't all of Broadcom's Wi-Fi chip customers targets too? Did Apple perhaps contribute to the coding algorithms for its purposes?
    Both Apple and Broadcom stated in court filings that the claims against Apple are “based solely on the incorporation of allegedly infringing chips” in Apple products. 
    Unfortunately for Apple as the defendant that's the way patent law works. 
    Yes, that's how infringement works. Even if it's Broadcom's chips which are responsible for the infringement - and even if Apple didn't know they infringed - Apple is guilty of infringing the patents. For that matter, we're guilty of infringing the patents if we use that functionality of our iPhones. But Caltech isn't, for obvious reasons, going to sue us.

    That said, it's likely that Broadcom's contract with Apple requires it to indemnify Apple in a situation like this.
    beowulfschmidtchemengin1FileMakerFeller
  • Reply 12 of 16
    carnegiecarnegie Posts: 1,078member

    bulk001 said:
    Apple is not having a string of bad luck recently. You cannot take other’s work and use it without paying. Where does Apple get its legal advice? The comments section of this forum? “Well some guy said he searched for wirel(ess) and nothing showed up and he said it is pretty abstract ... and some other guy said it would win on appeal ... so we’re okay to do it then.” 😅
    Apple wasn't found guilty of willfully infringing the patents. So it may not have known that Broadcom's chips infringed.

    In that sense, it's in much the same situation that we - those of us who use iPhones and other Apple devices - are in. We are infringing patents without knowing that we are. Why would we do that?
    flyingdpFileMakerFeller
  • Reply 13 of 16
    wonkothesanewonkothesane Posts: 1,724member
    Rayz2016 said:
    Apple is not being very smart with their legal team recently.
    Is this how it works - that the smarter „team“ wins? Maybe it’s simply that they infringed the law and the one who were not so smart were those responsible for screening the patent landscape when they decided to use the technology? 


    That's exactly how it works, and in my obviously uninformed opinion, Apple's legal team seems to chalk up more losses than wins, and when they do win, their opponent gets a slap on the wrist and carries on doing what landed them in court in the first place.
    I get your point. And if that’s a real pattern it would provide evidence on the performance of A‘s legal team. 
  • Reply 14 of 16
    loquiturloquitur Posts: 137member
    I am all for companies licensing technology fairly - but how is technology going to move forward if every new standard is filled with multi-year, billion dollar liability traps. FRAND currently means little and there is no protection whatsoever for technology companies to reasonably vet their products against possible infringement. There are thousands upon thousands of patentable inventions, each “essential” to the standard. We can’t run around awarding a billion dollars for each of them - that’s more than the retail
    cost of every device combined. 

    I am also rather tired of the nonsense argument that it’s IP and it’s always been this way - take this to the logical extension: Apple could never produce another device and become *more* profitable by just turning into an R&D lawsuit machine, then reinvesting those funds into further patent development and aggregation. It would be utterly formidable and completely legal and “ok”.

    Agreed.   It seems to come down to the notion of "apportionment", or the value of an idea compared to the thousands of other
    ideas in a complex system.  Courts haven't figured this out, leaving it to lay juries to judge the patent in parallel with USPTO
    re-examinations, leaving it to juries to come up with random number awards, etc.   Plus the double dipping exhibited in this broadside
    is getting old.   In the old days a parts supplier would indemnify the chip user against patent violations.   But Apple is such a
    deep pockets target the patent holder just might win the lottery of taking a grossly exaggerated percentage of the sales for an
    incremental improvement on ideas covered in standard textbooks, in this case concatenated coding.
  • Reply 15 of 16
    SpamSandwichSpamSandwich Posts: 33,407member

    Apple is not being very smart with their legal team recently.
    Is this how it works - that the smarter „team“ wins? Maybe it’s simply that they infringed the law and the one who were not so smart were those responsible for screening the patent landscape when they decided to use the technology? 

    Being no law expert one thing that strikes me as odd is that it would appear as a customer you need to understand if there are any patents involved for a supplied part and potentially cough up license fees. I would think that such matters should be fully handled on supplier level. 
    Yes, the smarter legal team is critical. And considering the wealth available to Apple due to their earnings, they really should be paying for the best available lawyers (not to mention the best lobbyists).
  • Reply 16 of 16
    Apple is not being very smart with their legal team recently.
    Is this how it works - that the smarter „team“ wins? Maybe it’s simply that they infringed the law and the one who were not so smart were those responsible for screening the patent landscape when they decided to use the technology? 

    Being no law expert one thing that strikes me as odd is that it would appear as a customer you need to understand if there are any patents involved for a supplied part and potentially cough up license fees. I would think that such matters should be fully handled on supplier level. 
    As previously stated, that’s not how patent law works. It cares not about customer or manufacturer generally. The question is how even an engineer can figure out these details, the patents are written very obtuse on purpose and how can they even prove that the exact same method was used. These days many of these lawsuits seem to end before all of this is hashed out. 
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