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What you need to know

  • U.S. District Court Judge Rodney Gilstrap has tossed a $506.2 million damages payout to Optis Wireless Technology.
  • The judge said that the damages have "legitimately been called into question."

Apple has potentially just dodged a $500 million damages payout.

As reported by Bloomberg, a federal judge has stricken a $506.2 million damages award for Optis Wireless Technology, a company who originally won a case against Apple for infringing on its patents.

Optis and its partners in the case, PanOptis Patent Management and Unwired Planet LLC, claimed that Apple's smartphones, watches, and tablets that operate over the LTE cellular standard were using its patented technology.

U.S. District Court Judge Rodney Gilstrap said the jury should have been allowed to consider whether the royalty demand was consistent with a requirement that standard-essential patents be licensed on "fair, reasonable and non-discriminatory," or FRAND, terms.

The patent trial in August, one of the few held during the pandemic, was part of an unusual sweep of verdicts in Texas that collectively resulted in $3.7 billion in damages against tech companies like Apple and Intel Corp. Apple was also hit with damages awards of $502.8 million in a decade-long battle over security communications technology, and $308.5 million in a case over digital rights management.

Gilstrap says that, after hearing the post-trial arguments, he is "persuaded that the FRAND-compliance of the damages awarded by the jury has legitimately been called into question."

Gilstrap criticized both sides for "intentional decisions" before the trial. Optis sought to tell the jury that Apple was an unwilling licensee without putting its own actions before the jury, Gilstrap said. At the same time, he criticized Apple for failing to object and being "wholly mute" because it didn't want the jury to hear "potentially harmful evidence" regarding its positions during licensing negotiations.

After hearing post-trial arguments, Gilstrap said he's "persuaded that the FRAND-compliance of the damages awarded by the jury has legitimately been called into question."

"> In large part because of the conscious acts of both parties, the court now finds itself left with a very large damages award made as to SEPs where the jury never heard the acronym FRAND or heard evidence about how that concept impacted a fair damages award in this case," Gilstrap said.

Gilstrap, however, said a trial on liability "is neither necessary nor warranted."

Neither Apple nor Optis responded to requests for comment about these new developments.