A $532,9 million fine for patent infringement left Apple fed-up with Smartflash, a patent licensing firm based in Tyler, Texas. Apple believes the verdict is an example of why the current patent licensing system is outdated en therefore should be reformed. The tech giant wants to cut out companies who own patents, but don’t make products in which the patents are being used.
“Smartflash makes no products, has no employees, creates no jobs, has no U.S. presence, and is exploiting our patent system to seek royalties for technology Apple invented,” said Kristin Huguet, an Apple spokeswoman. Smartflash sued Apple for using inventions in iTunes. The inventions are used for digital rights management, data storage and managing access through payment systems.
These are inventions owned by Smartflash, but Apple used them without permission. Wilfully, according to the jury. Smartflash therefore sued Apple and asked for 852 million dollar in compensation for the infringement.
The federal jury voted in favor of Smartflash. However, the 852 million dollar fine was reduced to 532,9 million dollar. Smartflash will not appeal the verdict. “Smartflash is very happy with the jury’s verdict, which recognizes Apple’s longstanding willful infringement”, Brad Caldwell, a Smartflesh hired lawyer, said in an e-mail to Reuters.
Apple will appeal the decision. “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,” Apple spokeswoman Huguet said.
Initially, app developers Game Circus and KingsIsle Entertainment were also defendants in the patent infringement case. They were dismissed from the case last year and do not have to pay Smartflash.