Caltech ends $1 billion patent case against Apple and Broadcom

Posted:
in iOS

Caltech's seven-year legal battle over Apple and Broadcom allegedly using its Wi-Fi patents has now been settled.

This is what the iPhone looked like when Caltech's legal case began
This is what the iPhone looked like when Caltech's legal case began



The case was expected to be concluded after the California Institute of Technology (Caltech) said in a court filing in August 2023 that a "potential settlement [has been] reached." That filing gave no more details, but said that a previously-scheduled status conference would continue on August 24, 2023.

It was also reported that the three companies were due to file a new, joint status report by August 18, 2023. It's not clear now whether that happened on schedule, but according to Reuters, Caltech has now formally filed a "request for dismissal" of the case.

The full, and rather short, court filing says that the company wishes to "hereby request and stipulate that all claims and counterclaims... be dismissed with prejudice." It stated this specifically over its dispute with Broadcom, but then added another line about Apple.

"In addition, Caltech respectfully requests that all counterclaims asserted by Apple also be dismissed with prejudice, with each party bearing its own costs and attorneys' fees," it continues. "Broadcom does not oppose this request."

Dismissing the case "with prejudice" means it cannot be refiled.

The case began in 2016 with Caltech accusing Apple and Broadcom of violating four of its Wi-Fi patents. In 2020, it won the case, with Apple ordered to pay $838 million for patent infringement, and Broadcom to pay $270 million.

Naturally, Apple and Broadcom appealed, and in 2022 did get a new trial. Significantly, though, the new trial was concerned only with the amount of damages the companies were to pay -- there was no question of overturning the guilty verdict.

None of the companies involved have commented publicly on the settlement.

Read on AppleInsider

Comments

  • Reply 1 of 11
    entropysentropys Posts: 4,212member
    I always found this case strange, at least why Apple was involved at all. Broadcom made the chips, and should be responsible for ensuring patents were covered. Apple bought the broadcom chips, but was somehow supposed to know if Broadcom was violating patents and thus wa also violating the patents.

    seems like a chasing the biggest pocket strategy
    Alex1N2morrowwatto_cobrabonobobtokyojimu
  • Reply 2 of 11
    carnegiecarnegie Posts: 1,078member

    ...


    It was also reported that the three companies were due to file a new, joint status report by August 18, 2023. It's not clear now whether that happened on schedule, but according to Reuters, Caltech has now formally filed a "request for dismissal" of the case.

    ...

    They did file that status report as well as several additional status reports between then and now.
    Alex1Nwatto_cobra
  • Reply 3 of 11
    carnegiecarnegie Posts: 1,078member
    entropys said:
    I always found this case strange, at least why Apple was involved at all. Broadcom made the chips, and should be responsible for ensuring patents were covered. Apple bought the broadcom chips, but was somehow supposed to know if Broadcom was violating patents and thus wa also violating the patents.

    seems like a chasing the biggest pocket strategy
    That's how patent law works. Making, selling, offering to sell, or importing a patented invention without authority is infringement, but so is using a patented invention without authority. So in theory you or I could be sued for using an iPhone which infringes a given patent if we use it in a way that infringes that patent - e.g., if we use the camera and something about its functioning infringes that patent.
    Alex1Nroundaboutnowwatto_cobrabonobob
  • Reply 4 of 11
    entropysentropys Posts: 4,212member
    Interesting. But should it not be that it is Broadcom using the patent, not Apple? I guess it is like receiving stolen goods?

    The due diligence on purchasing complex hardware must be excruciating. And of course favour big companies with the capacity to do so over the little guy.
    watto_cobra
  • Reply 5 of 11
    XedXed Posts: 2,668member
    carnegie said:
    entropys said:
    I always found this case strange, at least why Apple was involved at all. Broadcom made the chips, and should be responsible for ensuring patents were covered. Apple bought the broadcom chips, but was somehow supposed to know if Broadcom was violating patents and thus wa also violating the patents.

    seems like a chasing the biggest pocket strategy
    That's how patent law works. Making, selling, offering to sell, or importing a patented invention without authority is infringement, but so is using a patented invention without authority. So in theory you or I could be sued for using an iPhone which infringes a given patent if we use it in a way that infringes that patent - e.g., if we use the camera and something about its functioning infringes that patent.
    But Apple is also more culpable to be found over 3x more liable financially than Broadcom?

    And did Broadcom not have a single other customer than Apple for a the infringing WiFi chips?

    I feel like there is some missing info since the beginning of this lawsuit.
    williamlondonwatto_cobra
  • Reply 6 of 11
    macxpressmacxpress Posts: 5,843member
    carnegie said:
    entropys said:
    I always found this case strange, at least why Apple was involved at all. Broadcom made the chips, and should be responsible for ensuring patents were covered. Apple bought the broadcom chips, but was somehow supposed to know if Broadcom was violating patents and thus wa also violating the patents.

    seems like a chasing the biggest pocket strategy
    That's how patent law works. Making, selling, offering to sell, or importing a patented invention without authority is infringement, but so is using a patented invention without authority. So in theory you or I could be sued for using an iPhone which infringes a given patent if we use it in a way that infringes that patent - e.g., if we use the camera and something about its functioning infringes that patent.
    They included Apple because they have billions of dollars and thats the only reason. If it were some small company they wouldn't even bother. They wouldn't get the money or the headlines with a small company. Everyone thinks they deserve some of Apple success (money). 
    edited October 2023 williamlondon
  • Reply 7 of 11
    XedXed Posts: 2,668member
    macxpress said:
    carnegie said:
    entropys said:
    I always found this case strange, at least why Apple was involved at all. Broadcom made the chips, and should be responsible for ensuring patents were covered. Apple bought the broadcom chips, but was somehow supposed to know if Broadcom was violating patents and thus wa also violating the patents.

    seems like a chasing the biggest pocket strategy
    That's how patent law works. Making, selling, offering to sell, or importing a patented invention without authority is infringement, but so is using a patented invention without authority. So in theory you or I could be sued for using an iPhone which infringes a given patent if we use it in a way that infringes that patent - e.g., if we use the camera and something about its functioning infringes that patent.
    They included Apple because they have billions of dollars and thats the only reason. If it were some small company they wouldn't even bother. They wouldn't get the money or the headlines with a small company. Everyone thinks they deserve some of Apple success (money). 
    They included Apple because they have deep pocket. OK, you can sue anyone for anything at any time. But then why did the court determine that Apple was over 3 more liable than the chip supplier? Something doesn't track.
    williamlondon
  • Reply 8 of 11
    carnegiecarnegie Posts: 1,078member
    entropys said:
    Interesting. But should it not be that it is Broadcom using the patent, not Apple? I guess it is like receiving stolen goods?

    The due diligence on purchasing complex hardware must be excruciating. And of course favour big companies with the capacity to do so over the little guy.
    It might be argued that both of them (as well as others) are using the patented invention. But more importantly, Apple is selling, offering to sell, and importing the patented invention. If the patented invention is incorporated in, e.g., an iPhone, then selling that iPhone means selling the patented invention.

    As for the due diligence issue, it's very likely that Broadcom's contract with Apple provided some degree of indemnification for a situation like this. Indeed, the Federal Circuit's opinion and some things said in one of Apple and Broadcom's (somewhat redacted) briefs strongly suggests as much.
    muthuk_vanalingam
  • Reply 9 of 11
    carnegiecarnegie Posts: 1,078member
    Xed said:
    carnegie said:
    entropys said:
    I always found this case strange, at least why Apple was involved at all. Broadcom made the chips, and should be responsible for ensuring patents were covered. Apple bought the broadcom chips, but was somehow supposed to know if Broadcom was violating patents and thus wa also violating the patents.

    seems like a chasing the biggest pocket strategy
    That's how patent law works. Making, selling, offering to sell, or importing a patented invention without authority is infringement, but so is using a patented invention without authority. So in theory you or I could be sued for using an iPhone which infringes a given patent if we use it in a way that infringes that patent - e.g., if we use the camera and something about its functioning infringes that patent.
    But Apple is also more culpable to be found over 3x more liable financially than Broadcom?

    And did Broadcom not have a single other customer than Apple for a the infringing WiFi chips?

    I feel like there is some missing info since the beginning of this lawsuit.
    That's one of the reasons the case was headed for a retrial.

    The Federal Circuit vacated the infringement finding with regard to one of the three patents. That aspect of the decision doesn't seem to have been reported on as much and in some cases it's been inaccurately reported on. The Federal Circuit also vacated the damages award, and the reason for that goes to your point.

    One method that's used to determine damages when there's been a finding of infringement is to try to figure out what likely would have resulted from a negotiation between the parties. Jurors (or a judge) hear(s) evidence (e.g. expert testimony or royalty rates agreed to by different parties) relating to such hypothetical negotiations. They use that to determine appropriate damages. In this case Caltech argued that it could negotiate separately with Apple and Broadcom and it could reach two separate agreements with very different royalty rates - $0.26 per unit for Broadcom and $1.40 per unit for Apple. It argued that it could give Broadcom a license which excluded all chips that it sold to Apple. Then it could give Apple a license for its Broadcom chips at a much higher royalty than Broadcom was paying for its non-Apple chips. The jury accepted that argument and used a much higher royalty rate to determine the damages against Apple than it used to determine those against Broadcom.

    The Federal Circuit said no to that. It concluded that Caltech's evidence wasn't sufficient to support that two-tier damages approach. The Federal Circuit's reasoning likely meant that Caltech would have received a much smaller damages award against Apple in a retrial.
    muthuk_vanalingam
  • Reply 10 of 11
    carnegiecarnegie Posts: 1,078member
    macxpress said:
    carnegie said:
    entropys said:
    I always found this case strange, at least why Apple was involved at all. Broadcom made the chips, and should be responsible for ensuring patents were covered. Apple bought the broadcom chips, but was somehow supposed to know if Broadcom was violating patents and thus wa also violating the patents.

    seems like a chasing the biggest pocket strategy
    That's how patent law works. Making, selling, offering to sell, or importing a patented invention without authority is infringement, but so is using a patented invention without authority. So in theory you or I could be sued for using an iPhone which infringes a given patent if we use it in a way that infringes that patent - e.g., if we use the camera and something about its functioning infringes that patent.
    They included Apple because they have billions of dollars and thats the only reason. If it were some small company they wouldn't even bother. They wouldn't get the money or the headlines with a small company. Everyone thinks they deserve some of Apple success (money). 
    Sure. Apple's deeper pockets were likely a consideration. But Caltech likely also wanted to make the two-tier damages argument I referred to in the previous post. By including Apple they could argue for a device-level royalty rate from Apple. They wouldn't have been able to justify as high a rate if they had only sued Broadcom, because then they'd be arguing a chip-level royalty rate for all the units. So they hoped to accept a lower royalty rate for the chips Broadcom sold to others (in part because arguing a device level rate for those would have been less valuable because the devices they went into would tend to be sold at lower prices) while also getting a higher effective rate for the chips Broadcom sold to Apple.
    muthuk_vanalingam
  • Reply 11 of 11
    macxpressmacxpress Posts: 5,843member
    carnegie said:
    macxpress said:
    carnegie said:
    entropys said:
    I always found this case strange, at least why Apple was involved at all. Broadcom made the chips, and should be responsible for ensuring patents were covered. Apple bought the broadcom chips, but was somehow supposed to know if Broadcom was violating patents and thus wa also violating the patents.

    seems like a chasing the biggest pocket strategy
    That's how patent law works. Making, selling, offering to sell, or importing a patented invention without authority is infringement, but so is using a patented invention without authority. So in theory you or I could be sued for using an iPhone which infringes a given patent if we use it in a way that infringes that patent - e.g., if we use the camera and something about its functioning infringes that patent.
    They included Apple because they have billions of dollars and thats the only reason. If it were some small company they wouldn't even bother. They wouldn't get the money or the headlines with a small company. Everyone thinks they deserve some of Apple success (money). 
    Sure. Apple's deeper pockets were likely a consideration. But Caltech likely also wanted to make the two-tier damages argument I referred to in the previous post. By including Apple they could argue for a device-level royalty rate from Apple. They wouldn't have been able to justify as high a rate if they had only sued Broadcom, because then they'd be arguing a chip-level royalty rate for all the units. So they hoped to accept a lower royalty rate for the chips Broadcom sold to others (in part because arguing a device level rate for those would have been less valuable because the devices they went into would tend to be sold at lower prices) while also getting a higher effective rate for the chips Broadcom sold to Apple.
    So yes, they sued Apple because of their billions of dollars and thats the only reason why. Thanks for proving my point. 
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