Apple off the hook for $308.5 patent infringement, after scheme discovered

AppleInsider

A federal judge has handed Apple a win, ruling to toss a $308.5 million patent infringement verdict because of an underlying scheme to extract more money from companies.

Credit: AppleInsider

The case centered on a patent for digital rights management technology owned by Personalized Media Communications (PMC), which first sued Apple in 2015. Earlier in 2021, a federal jury decided that Apple should owe $308.5 million in royalties to the firm.

However, U.S. District Judge Rodney Gilstrap has tossed that verdict, Bloomberg reported Friday. Gilstrap ruled that PMC patent wasn't enforceable because the company intentionally delayed its application so that it could extract more royalties from technology companies.

PMC's patents date back to applications filed in the '80s. At the time, the terms of a patent lasted 17 years no matter how long the application process took. The company filed for numerous patents in the '80s and '90s, but none were awarded until 2010.

To reach his decision, Gilstrap relied on a June ruling from a top patent court that made it easier for companies to challenge "submarine patents." The tactic revolves around patent applicants delayed issuance of a patent until an industry adopted the technology. In other words, it's a scheme to ensure that patent infringement lawsuits would be more profitable.

"The course of conduct undertaken by PMC constitutes an unreasonable delay and an abuse of the statutory patent system," Gilstrap wrote.

According to internal company documents reviewed by Gilstrap, PMC carried out a strategy to ensure patents wouldn't be issued until infringement became widespread in the technology industry. A 1991 document specifically named Apple among "natural candidates" for being hit by the scheme.

The original lawsuit, first filed in 2015, took aim at Apple's FairPlay software, which is used to ensure DRM on content from iTunes, the App Store, and Apple Music.

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crowley

$308.5!   

spock1234

Oh, Snap! Couldn’t have happened to a more deserving patent troll! 😂

ArchStanton

Patent trolling hurts consumers. Consumers win when the legal system recognizes the difference between a patent troll and valid stolen ideas. 

Every single company from Apple to Google to your chosen auto company to your appliance maker has built into their pricing, that we! pay, the price of defense to patent trolling and lawsuits on almost every product that occurs (they troll for technicalities in ToS or gray area designs). On this second one we consumers also pay because companies must fight everything. 

j2fusion

Good!  We need more of this. You should not be able to lay a patent trap. 

lam92103

Patent & Copyright laws have been abused for too long

jdw

We need more common sense judges who toss out inept jury verdicts.  It's because juries consistently award thieves with millions that the thieves continue to abuse the system.  Bravo to this judge!

mknelson

spock1234 said:

Oh, Snap! Couldn’t have happened to a more deserving patent troll! ߘ⦬t;/div>

Funny thing is…

https://www.patsnap.com

Is a legitimate IP management company. (Patent research).

ronn

While I applaud this ruling, it should have never gotten this far. Judges need to act before it even reaches a jury. The trolls rely on lazy judges and slow justice (not to mention overburdened and/or clueless juries). Apple and other behemoths can fight. But smaller companies can't rely on a ton of money to fight a huge battle via appeals over several years.

geekmee

I am sure Apple has planned for some of this…
After all, Apple is where the money is!

melgross

I’ve seen this numerous time, and have commented on it each time. When an entity waits until a patent becomes more valuable, to when a company is so tied to it that they must use it, that entity shouldn’t be allowed to benefit.

but there’s a problem sometimes because patents aren’t always obviously being violated until much later.

but this isn’t the case apparently. The company was aware of what was happening early on and chose to use delaying tactics in their applications.

daven

A glimmer of hope for our broken patent system?

radarthekat

melgross said:

I’ve seen this numerous time, and have commented on it each time. When an entity waits until a patent becomes more valuable, to when a company is so tied to it that they must use it, that entity shouldn’t be allowed to benefit.

but there’s a problem sometimes because patents aren’t always obviously being violated until much later.

but this isn’t the case apparently. The company was aware of what was happening early on and chose to use delaying tactics in their applications.

Agreed.  The invention is what should be protected for a period of time starting when the invention is claimed. It should not be tied to the eventual award of the patent.  Justice is served this time and hopefully more often.  

dewme

I just wish that the government could impose a proportional fine on the claimant for the fraudulent scheme. 

MacPro

There should be serious ramifications for this company, it's a case of fraud one would think!