Apple Inc. (NASDAQ:AAPL) was targeted yesterday by a lawsuit from patent assertion entity (PAE) Innovative Display Technologies LLC, registered in Austin, Texas and doing business from an office in Plano. Innovative, which is a newly minted firm founded on March 13th, 2013, has spent its brief life suing Apple, Microsoft, Google, Dell, Volkswagen, Toyota, and dozens of other major firms. Yesterday, it filed a new lawsuit against Apple Inc., alleging infringement of a 2004 patent related to the design of backlighted displays.
Though vastly overshadowed by the epic struggle between Apple Inc. (AAPL) and Samsung over $2.17 billion in damages, Innovative Display Technologies’ claims are worthy of note for their sheer cheek and excessive size. The complaint asserts that the plaintiff is due “at least” fair and reasonable royalty payments, plus interest, for all infringing devices over the whole period of infringement. This would be a massive sum, since Innovative claims that every Apple product made since 2004 is infringing on its patents.
“Usual and customary royalties” are considered to be approximately 5% in the United States, calculated as a share of the firm’s net income. Over the 2004 to 2014 period, Apple’s total net income was $114.2 billion. The Plano-based patent troll is therefore effectively claiming no less than $5.7 billion in accrued royalties, plus an unspecified amount of interest and court costs.
The specific patent on which Innovative Display Technologies LLC is basing its lawsuit is U.S. Patent #6,755,547, plus a number of child patents. This document is titled “Light Emitting Panel Assemblies,” and was applied for and granted to one Jeffrey R. Parker of Richfield, Ohio. The patent was for a backlit display consisting of a backlight, and a front plate with a textured inner side whose molded features would create different light levels on various parts of the screen. The patent was filed initially on August 30th, 2002 and granted on June 29th, 2004.
According to Patent Buddy, Innovative owns at least 49 patents, all of which were purchased from existing patent holders. The patent assertion entity filed a lawsuit against Google (GOOG) today based on the same patent, #6,755,547, with the same damages of “fair and reasonable” royalties plus interest. Both suits are filed at the United States District Court for the Eastern District of Texas.
Though Innovative Display Technologies, LLC stands little chance of winning its suits against Apple Inc. (AAPL) or Google (GOOG), the size of its claims is remarkable even in the world of patent trolls. If successful, its suits would likely net it more than $10 billion dollars from all defendants combined, plus entitle it to more or less permanent royalties on all current and future Apple and Motorola products incorporating a backlighted screen.
