A federal jury in Texas has ordered Apple to pay $533 million in damages after it found that the company's digital media distribution services – including the iTunes Store – infringed on three patents owned by Smartflash LLC. The patents in question were allegedly used without permission in third-party games that were available from iTunes.
According to Bloomberg:
The game companies settled out of court with Smartflash, with Apple deciding to go to court on grounds that the patents in question "were invalid." Kristin Huguet, an Apple spokeswoman, said:
Smartflash does not sell products itself, with its only source of income coming from the seven patents it holds, all of which are attributed to its co-founder Patrick Racz. The company sought $852 million in damages from Apple, a number arrived at calculating a portion of iPhone, iPad and Mac device sales. Apple said that the patents were worth $4.5 million at most, with general counsel Eric Albritton arguing that there was no valid reason for the hardware giant to pay royalties on device sales when the patent dispute is over a single feature. According to the lawyer:
Apple failed in its attempts to persuade the jury that the patents in question were not directly used by iTunes. The Cupertino giant also failed in its bid to get Smartflash's patents invalidated.
With the Apple case coming to a close, Smartflash is going after Samsung next. The company also sued Google and Amazon over the usage of the same patents in their respective digital distribution services. You can view Smartflash's court filing against Apple in its entirety here.
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