February 25, 2015
Apple Loses Patent Infringement Case

A jury has decided that Apple infringed on existing patents when it developed its iTunes storage database after less than eight hours of deliberation, according to several reports. The jury has ruled that Apple must pay out $533 million to Smartflash LLC due to the patent infringement. However, Apple has said that it plans on appealing the ruling in higher courts.

Smartflash LLC, who has its headquarters in Tortola but offices in Texas, filed the suit in a Texas court in May 2013. They said that Apple had infringed on six of its patents which related to the storage of music and video files, as well as games. The suit, which can be seen online, originally asked for $852 million, as it claims that Apple had made over $18 billion off of iTunes in the last fiscal year, which accounts for roughly 10% of Apple's yearly revenue.

Speaking about the verdict, an Apple spokesperson has said that they are planning to appeal it. It was also said that the suitor, Smartflash LLC, holds no value due to the fact that it creates no jobs or revenue, comparing them to "patent trolls" who abuse the U.S. patent system for their own gain.

"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. We refuse 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."
Brad Caldwell, a lawyer for Smartflash LLC, said that Apple's appeal was an expected development. Expected due to the nature of the suit, as well as what may potentially be at stake other than the financial pay-out Apple faces, should they lose the appeals process.
"I would expect Apple to say they will appeal as part of Apple's standard operating procedure. However, Smartflash believes the facts and the law support the jury's verdict."
Should Apple lose the appeals process, they may end up having to completely overhaul the iTunes backend and have to come up with an entirely new way of storing all their files. Not only is Smartflash LLC looking for a financial settlement, which appears to be coming the company's way, but it is also looking for a percentage of the sales of iPhones, iPads, Macs and any other devices which currently use iTunes. This may indicate that Smartflash LLC may be looking to form some type of settlement with Apple whereby Apple may continue to use iTunes as it is, but will have to pay Smartflash LLC royalties, as well as royalties owed since iTunes was first released.

[Image via Justin Sullivan/Getty Images]