In February, a federal jury in Texas sided with a patent licensing company called Smartflash and ordered Apple to pay $532.9 million for infringing upon three patents dealing with data storage, payments, and DRM.
Apple vowed to fight it, obviously, saying:
“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. We refused to pay off this company for the ideas our employees spent years innovating and unfortunately we have been left with no choice but to take this fight up through the court system.”
Well, fight it did and a significant victory it has won. A federal judge has thrown out the jury ruling, nullifying what would’ve been the biggest payment in one of these now-ubiquitous “patent assertion” cases.
According to the judge, it was all about the massively inflated award. From Reuters:
In a decision on Tuesday, U.S. District Judge Rodney Gilstrap in Tyler, Texas, said jurors who on Feb. 24 awarded the damages to Smartflash LLC because of Apple’s willful infringement might have been confused by his instructions on how to properly calculate royalties.
Apple had argued that the damages were too high because jurors might have improperly considered the entire market value of the products, rather than distinguishing between patented and unpatented features.
Gilstrap said his jury instructions were legally correct but not applicable to the facts of the case, and “may have created a skewed damages horizon for the jury.”
The bad news for Apple is that a retrial has been scheduled for September 14th.
All this is taking place in the Eastern District of Texas, where a shockingly high number of patent lawsuits are battled (nearly 25 percent). Why such a high percentage? Juries there tend to give patent licensers favorable results.