Apple on hook for $308.5M in DRM patent suit

A federal jury in Texas on Friday decided Apple owes $308.5 million in royalties to Personalized Media Communications for infringing a digital rights management patent.

Following deliberations, a jury in the patent holder-friendly Marshall, Texas, district found Apple technology, including FairPlay, in infringement of a patent held by non-practicing entity Personalized Media, reports Bloomberg. FairPlay is used to distribute encrypted content on iTunes, the App Store and Apple Music.

Personalized Media first sued Apple in 2015, but the case took years to make its way to trial. Apple successfully challenged the patent-in-suit with an appeal to the U.S. Patent Trial and Appeal Board, which subsequently invalidated certain claims of the IP. That ruling was ultimately reversed by an appeals court in 2020, sending the case to trial.

According to the report, an expert called by Personalized Media calculated Apple's owed royalties to be $240 million, but jurors decided to apply a running royalty rate that

ran the figure up to $308.5 million. Running royalties are typically calculated with a basis in unit sales or service engagement.

Apple in a statement said it was disappointed in the ruling and intends to appeal.

"Cases like this, brought by companies that don't make or sell any products, stifle innovation and ultimately harm consumers," the company said.

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19 Comments

leighr

said about 3 years ago

In these cases, where “companies” have simply bought a patent that is similar to an industry-wide practice, the payout figure needs to be somehow based on a percentage of the infringed companies’ own production numbers vs the infringing company. So that a company that makes zero products themselves have essentially a zero dollar claim, but a company that has a $5M turnover, which could be shown to have been $50M, had the IP not been copied, are compensated appropriately. This would, as Apple states, stop these ridiculous non-practicing entities from making ludicrous claims.

verne arase

said about 3 years ago

Huh. Texas again.

Between don't with my internal policies Texas trying to get elections overturned in other states (which had already gone through two or three recounts), their reluctance to hook up with national power grids and their failure to winterize their power production facilities (it don't get that cold that often), and their reluctance to implement any infection control protocols one wonders what will next be coming from that state.

Certainly it's the home turf of the patent troll courts - and every time I see them mentioned in the news it just seems like the state is just stuffed full of fatheads.

Methinks if Texans want to regain the respect of the nation the first step they must take is to vote out the riff-raff they have running the state and elect some decent non-Trumpian reality-based local government - then again, maybe there's a reason that the state is run by such a pathetic collection of bozos.

gatorguy

said about 3 years ago

verne arase said:

Huh. Texas again.

Between don't with my internal policies Texas trying to get elections overturned in other states (which had already gone through two or three recounts), their reluctance to hook up with national power grids and their failure to winterize their power production facilities (it don't get that cold that often), and their reluctance to implement any infection control protocols one wonders what will next be coming from that state.

Certainly it's the home turf of the patent troll courts - and every time I see them mentioned in the news it just seems like the state is just stuffed full of fatheads.

Methinks if Texans want to regain the respect of the nation the first step they must take is to vote out the riff-raff they have running the state and elect some decent non-Trumpian reality-based local government - then again, maybe there's a reason that the state is run by such a pathetic collection of bozos.

Those patent courts are Federal and not state. If you voted all the Texas rascals out it wouldn't affect the rulings such as this one from Federal District courts there.

By the way, Personalized Media also sued Google using the same patents and in Texas patent courts in front of Texas jurors, so Apple wasn't singled out. Noteworthy is that Google won their case. Perhaps Apple's arguments were different and not as effective/pertinent.
https://ncjolt.org/blogs/google-wins-infringement-case-at-trial-over-video-streaming-patent-covering-1980s-inventions/

EsquireCats

said about 3 years ago

Texan jurors doing what they need to do to keep their little pot of gold running...

Patent reform in the country is well overdue. It’s unfair to claim damages when neither producing a product, nor even possessing the ability to produce such a product due to having insufficient complementary IP or technical know-how. What damage has truly been done?

What we have right now is just a silly trap for anyone who does create products. It needlessly elevates the cost to consumers while providing no alternative options in the market place.
The other side issue: it effectively funnels money from a large number of consumers into an entity which contributes nothing to society. Because these suits happen retrospectively those consumers were additionally denied a choice in who they spent their money with.

gatorguy

said about 3 years ago

EsquireCats said:

Texan jurors doing what they need to do to keep their little pot of gold running...

Gosh, the $50 a day the Texax jurors get must be building up quite the nest-egg for them.

As for patent reform, an inventor will always be allowed to monetize his invention. Otherwise, why have patents at all? Are you advocating that only the more wealthy who can afford to actually build a product using them should be allowed to have one? The guy in his garage who comes up with that unique thing but has no funds to build a factory can't protect what he's invented, if nothing else sell his idea to someone who can afford to put it to use? Should that be allowed?

BTW, wealthy techs such as Apple file a whole lotta patents to protect "inventions" they have no plans of using in a shipping product. What it does accomplish is blocking some other person or company from creating a products that can be deemed to read on the claims of an "Apple invention" and compete with them in at least some minor way. That stifles innovation rather than encourages it. Should that be allowed?

You might forget that Apple themselves sued Samsung in a billion dollar trial using in part patent claims they themselves did not use for an actual Apple product. That sounds like a non-practicing entity, someone not building a product using a patent claim they sue someone else over. Should that have been allowed?

Anyway, a short article about those Texas patent courts:
https://www.thompsoncoburn.com/insights/publications/item/2021-03-10/a-race-between-west-texas-and-delaware-for-the-patent-venue-of-choice