Apple hit with $676 million legal bill in patent case

Apple said it will appeal the decision. Source: AFP

 

APPLE has been ordered to pay $676 million ($US$532.9 million) by a US federal jury that found Apple’s iTunes music store uses software that infringes on patents held by a Texas company. 

An lawyer for plaintiff Smartflash LLC praised the verdict. Apple immediately announced plans to appeal and said the case shows the need for Congress to reform the U.S. patent system.

The case involves three patents that Smartflash holds for software used in storing data files and managing access through an online payment system. The outcome will likely add fuel to a broader debate over the federal patent system and complaints that it’s easily abused by companies that make most of their revenue through patent lawsuits.

“Smartflash makes no products, has no employees, creates no jobs, has no US presence and is exploiting our patent system to seek royalties for technology Apple invented,” Apple said in a printed statement. The statement added: “We rely on the patent system to protect real innovation and this case is one more example of why we feel so strongly Congress should enact meaningful patent reform.”

Apple chief executive Tim Cook oversees a company that is worth $US750 billion. Source: AP

 

The suit was heard by a federal jury in the Eastern District of Texas, which has become known as a hotbed for patent lawsuits and a favourite jurisdiction for lawyers pursuing patent claims.

Smartflash is headquartered in Tyler, Texas, where the court is also based.

While Apple denied infringing on Smartflash patents, an lawyer for the Texas firm said jurors in the case worked hard and “saw through” Apple’s arguments.

The jury agreed with Smartflash’s argument that Apple used software based on ideas patented by inventor and Smartflash executive Peter Racz, without permission. The Texas firm alleged that in 2000, Racz met to discuss his ideas with prominent software designer Augustin Farrugia, who was then working for a European company but later joined Apple to work on security programs for its iTunes store.

Apple has lost two previous patent cases in the Eastern District of Texas and successfully appealed both of them.

In the Smartflash case, the jury’s award of $676 million is unlikely to be a financial strain for Apple, which earned $US39.5 billion in profit last year on sales of $US182.8 billion.

news.com.au 26 Feb 2015

Apple, another company committing corporate fraud, that is allowed to exist.

A company that only exists from slave labour and appalling work conditions.

A company that defrauds tax offices world wide of hundreds of millions of dollars annually.

The Australian government also sues multinational IT companies for hundreds of millions of dollars over its patented Wi-Fi technology that the companies use in their products.