Apple ordered to pay more than $500 million for violating patents with iTunes
Apple loses in court.
Billboard reports that Apple has been ordered to pay $532.9 million in damages for infringing on three patents owned by Texas-based licensing firm Smartflash LLC.
Smartflash sued Apple in 2013, claiming that the tech giant had used its patents in several iTunes applications, including the app store and the iAd advertising platform, seeking $852 million in damages. The company argued that Apple got the ideas for the technology when founder Patrick Racz gave a presentation in 2000 that was attended by Augustin Farrugia, currently a senior director at Apple.
Apple denied any wrongdoing, arguing that Smartflash’s patents were invalid because they were “rehashes” of previously patented inventions. They plan to appeal the ruling.
“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 statement to Bloomberg. “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.”
Smartflash has been described as a patent troll, a company that attempts to collect licensing fees but does not manufacture goods or supply services based on the actual patents. For a sense of what the ruling could cost Apple, $533 million is about one-third of a percent of their reported $176 billion cash reserve.