Apple gets patent trolled, ordered to pay $532.9 million

Apple gets patent trolled, ordered to pay $532.9 million
Smartflash LLC, a company from Tyler, Texas, has just won a patent trial against Apple, where jury ruled that Cupertinians owe $532.9 million to the small company. The patents, which Apple supposedly infringed upon, involve data storage, payment systems, and DRM, the main target for the case was, of course, iTunes.

Smartflash was initially seeking $852 million in damages, though, Apple argued that it's not infringing on any patents, and that if it was – their worth would be about $4.5 million. It further questioned why Smartflash took so long to bring up the issue, and added

Is Apple far from the truth? Well, Smartflash was founded in the 2000's by Partick Racz, and so far, its only business is licensing a number of patents, which have been issued between 2007 and 2012. Its address registration points to an office building just next to the courthouse where the trial is held. The company is also looking to sue Samsung and Google, as the latter is trying to have the trial transferred from the Texas court to California. Smartflash has sued Amazon Inc. just this past December, though, we are having trouble finding information on how that went.

So, back in the 2000s, as Mr. Racz was trying to commercialize his ideas, he offered the currently patented technologies to various execs, one of which is Apple's current Director of Security. Presumably, Racz's argument is that this is when his invention was passed along, without him being paid for it, and, aside from the sum in damages, he also claimed he deserves a royalty payment for each and every iPhone, iPad, iPod, or Mac, which is used to access iTunes.

Well, the jury didn't agree with all points, but ultimately found Smartflash's patent claim to be legitimate, and ordered Apple to pay $532.9 million in damages to the plaintiff. Now, Apple is most probably going to appeal, but this got us thinking - we're not really sure how that case held water, but we're considering on registering a few patents, just in case.

source: Bloomberg via SlashGear



1. RebelwithoutaClue unregistered

"has no U.S. presence" Why should this matter? The other arguments I can agree on (some more, some less), but I fail to see what this argument has to do with anything.

4. rallyguy

Posts: 620; Member since: Mar 13, 2012

What does creating jobs have anything to do with something you created?

5. paul.k

Posts: 304; Member since: Jul 17, 2014

They were just trying to say "patent troll!", without using the actual words

9. RebelwithoutaClue unregistered

Nothing, but when your invention/patent creates jobs, you are hardly a patent troll

25. remsammi

Posts: 12; Member since: Jan 27, 2015

Unless your company "makes no products, has no employees, creates no jobs" -- except for bloodthirsty, overpaid, bureaucratic lawyers. That is the very essence of the patent troll.

31. RebelwithoutaClue unregistered

Agreed, I don't consider lawyers suing on your behalf a synonym for creating jobs

26. remsammi

Posts: 12; Member since: Jan 27, 2015

If your company is allegedly a US company and it's suing another US company in a US court, it matters plenty. If it went overseas to sue Samsung, it could be argued the company has no Korean presence. Patent trolls are just a leech on the system. They produce nothing except headaches, but certainly nothing tangible. You could argue Apple is engaged in patent trolling via Rockstar, but at least Rockstar is the brainless monster to protect the companies that created it. (I can't believe I'm playing devil's advocate for Apple of all things.)

29. corporateJP

Posts: 2458; Member since: Nov 28, 2009

Eye for an eye...turn about is onto others as they would do onto well with others... You get the drift yet? Plenty of iOS products in our home, but I hardly side, nor feel bad, for Apple and their business practices. Goes back to that bitch called karma...

33. quakan

Posts: 1419; Member since: Mar 02, 2011

Karma? This is just business as usual. Nothing to be worked up about.

37. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

+1. If the roles had been reversed, Apple would have filed suit and buried the infringer. Patent law has no requirement that the patent owner create jobs to be able to enforce their patents. This was pure sour grapes on Apple's part.

39. hominey_hominey

Posts: 5; Member since: Aug 25, 2014


52. Withtechfriends

Posts: 20; Member since: Mar 29, 2014

CorporateBitch, stop being a hater just because. The "company" serves no purpose and has created nothing. Their idea isn't even original. Thus it shouldn't be patent able.

56. corporateJP

Posts: 2458; Member since: Nov 28, 2009

What's up, h0mo?

2. Kruze

Posts: 1285; Member since: Dec 30, 2014

Apple deserved it, here's your bitter gourd for your taste of your own medicine.

22. Finalflash

Posts: 4063; Member since: Jul 23, 2013

Half a billion....this is like the Samsung vs Apple case bad, they really got a taste of more than just their medicine.

28. tech-lover

Posts: 108; Member since: Feb 20, 2015

Actually they deserve much much more...! Good news.hehe.

40. Mobilephile

Posts: 173; Member since: Nov 25, 2012

Poor apple. This just clearly shows they are slow on technology and not up to speed. Sorry to say they deserve it. Still no respect!

53. Withtechfriends

Posts: 20; Member since: Mar 29, 2014

Actually they didn't get a taste of anything. I'd agree if this company was a real company, and the money went toward paying employees and creating new products, instead it went into him taking a dck in the sass.

57. corporateJP

Posts: 2458; Member since: Nov 28, 2009

All of Tim Cook's minions, such as yourself, have a good amount of experience in the field of d!cks in a$$es, so it doesn't shock me that you're here speaking about it...

58. aslucher

Posts: 2; Member since: Feb 26, 2015

Hey genius, are you going to be saying the same mindless bull when they turn around and sue Samsung, Google, Microsoft, etc? You realize they will use their ruling against Apple as justification to the patents and then legally they HAVE to sue anybody else who infringes. Or else if they don't they can loose their patent credibility?

59. donfem

Posts: 708; Member since: Mar 30, 2011

What a load of rubbish.

3. sonisoe

Posts: 440; Member since: May 06, 2009

its hard to argue if apple themselves aren't patent trolls... so apple has found their match....

24. Iodine

Posts: 1515; Member since: Jun 19, 2014

They aren't having a patent hoard just to sue out money from other companies. So why should be they a patent troll ? Because they patented something ?

30. JumpinJackROMFlash

Posts: 464; Member since: Dec 10, 2014

Because they patent extremely obvious things which they only hoard and then sue others. Apple = Patent troll #1 so it gladdens me too se them eat crow. karma is a fickle bitch.

49. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

That is a lie, they do. They have lots of patents for crap they haven't made or didn't even make that they were granted a patent for. Example...The patent for slide to unlock. A) iT should never have been granted because it is not obvious and novel as is required by patent law B) There was another device that used the same gesture, it simply didn't have the graphic C) The concept dates back to the Egyptians who had the first known sliding/locking mechanism D) Sliding locks have been on doors for over 3 centuries. Yet Apple sued Samsung and other OEM's with it. Isn't that patent trolling?

54. Slammer

Posts: 1515; Member since: Jun 03, 2010

Patent holding firms aren't holding on to patents to sue. They hold onto them to license or sell to other companies. Like flipping a house. You rent or resell to regain your investments. That's why "Patent Troll" can be such an abrasive term. However, my view is I don't like holding firms because it stagnates innovation. Strict reviews should be instituted before granting it to someone. Use it or lose it. But, until then, play by the rules and abide by the law or get sued and lose. John B.

6. dimas

Posts: 3435; Member since: Jul 22, 2014

"So, back in the 2000s, as Mr. Racz was trying to commercialize his ideas, he offered the currently patented technologies to various execs, one of which is Apple's current Director of Security." Good win Racz. I don't see it as patent trolling since he presented his ideas to an Apple exec. The exec could have seen that the technology have potential but don't want to pay royalties. Same thing happens in script writing. You show a good story to a producer, producer claim that it will not make money then do something similar to the junked script and call it his own.

21. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

As you have expect, "jury's verdict, which recognizes Apple's longstanding willful infringement," Apple can learn from the best in ligation, Microsoft. Settle with smartflash pay them 600 millions up front to sue Google/Samsung and not settle. If smartflash settled with either they will have to refund a large portion of the money. That what Microsoft did when force feedback immersion sued both Microsoft Xbox 360 and Sony PS3 for controller vibration patent.

7. GeorgeDao123

Posts: 432; Member since: Aug 20, 2013

I wish Apple would pay. Hahaha...

27. remsammi

Posts: 12; Member since: Jan 27, 2015

Apple pay. I get it.

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