In February 2015 the Guardian online reported that Apple had been ordered to pay more than $530m after a federal jury in Texas found its iTunes software infringed three patents owned by a patent licensing company called Smartflash. The jury determined Apple had not only used Smartflash’s patents without permission, but did so wilfully. The patents concerned digital rights management, data storage and payment systems. Apple, which said it would appeal, said the outcome was another reason that reform was needed in the patent system to curb litigation by companies that do not make products themselves.
Smartflash sued Apple in May 2013, alleging its iTunes software infringed its patents related to accessing and storing downloaded songs, videos and games. “Smartflash is very happy with the jury’s verdict, which recognises Apple’s longstanding wilful infringement,” said Brad Caldwell, a lawyer for Smartflash.
The trial was held in Tyler, Texas, which over the past decade had become a focus for patent litigation. Smartflash’s registered office was also located in Tyler. Apple tried to avoid a trial by having the lawsuit thrown out. However, US district judge Rodney Gilstrap, who presided over the case, ruled that Smartflash’s technology was not too basic to deserve the patents. Apple had asked the jury to find Smartflash’s patents invalid because previously patented inventions covered the same technology.
As a result Apple lost a whole mark under Anti-Social Finance.