Apple is no stranger to lawsuits, and the company emerges successful most of the time it comes under fire in the courtroom. However, at the conclusion of a long-running patent trial, Apple has lost the war to Smartflash, a Texas-based company, and has been charged by the court to pay out $532.9 million to the latter.
The patent lawsuit filed by Smartflash against Apple Inc. (NASDAQ:AAPL) in Tyler, Texas, claimed that Apple Inc. had used three patents the company owns without its permission for the development of some of the features built-in to Apple products.
According to Smartflash, the patents infringed by Apple were used for the development of a system of digital rights management and also some other inventions by Apple related to data storage and some accessibility features embedded into its payment systems, all contributing to the build of the iTunes system.
Smartflash further maintained that the three patents had benefited Apple Inc. in the millions of dollars, and asked for a compensation worth $852 million from the company in its patent lawsuit, amounting to the percentage of sales that had resulted from the use of its patents.
Apple Inc. lashed out at Smartflash during the trial as well, coming up with counterarguments for the case presented by Smartflash in court. In a statement to the press, an Apple spokesperson called Smartflash a company that monetized only on suing other companies on patents that were not rightfully its own.
The spokesperson also provided a clarification to all the allegations pressed forward by Smartflash in court, claiming the patents were worth no more than $4.5 million. Apple also denied having stolen the patents, rather argued the patents were created on the inventions of Apple employees, who had worked hard to come up with these inventions. According to an Apple spokesperson, Smartflash was only “exploiting [it’s] patent system to seek royalties for technology Apple invented.”
Smartflash came into existence in the year 2000 as a retailer of ideas presented by owner Patrick Racz. According to reports, the company has even sold patents amounting to $200,000 in value. The entire business of the company currently is the selling and maintaining patents to 7 ideas that it holds licenses on. Other than these, the company deals in nothing else.
This limited scope of business based the entire case of Apple Inc., which claimed the company was fraudulent and suspicious, and had formulated its entire case on “excessive and unsupportable” claims. Apple went further to assert the patents being fought for by Smartflash were not only unowned by Smartflash, but also invalid in nature.
Smarflash has also sued another rival mobile manufacturing business, Samsung Electronics, for multiple infringements. Google Inc. has also come under fire by Smartflash only recently, a case for which is already being fought currently in Texas, and on its way to getting transferred to a court in the state of California.
For now, Apple Inc. (NASDAQ:AAPL) is bound to pay $532.9 million to Smartflash. But, the company is not willing to give in so easily, and will take the case to higher courts for further clarification, according to an Apple spokesperson.
