Apple and Nokia end legal dispute and sign patent license

On May 24, 2017, in Apple, by Alastair Dodwell

Apple and Nokia have signed a multi-year patent license deal

After battling each other of many years that resulted in Nokia phone business being sold to Microsoft and now completely irrelevent, the two companies have agreed a multi-year patent license deal under which Nokia will provide network infrastructure product and services to Apple. No mention of handsets.

Nokia will receive an upfront cash payment and additional revenues from Apple starting from the current quarter. Details of the figures were not provided but analysts said revenue was likely to be much higher than a previous deal.

“We expect the revenues of Nokia Technologies to rise significantly following this agreement,” Liberum said. “The business collaboration may have partially helped compensate for a lower royalty rate in Apple’s favour, but the longer term revenue upside for Nokia could be greater with this approach. Buy.”

The deal puts to rest an intellectual property dispute between the two, which was expected to drag on.

Nokia and Apple took legal action in December following the expiry of a patent licence between the companies last year. Nokia accused Apple of violating patents while the iPhone maker complained of being overcharged.

Without a new contract, Nokia cut its annual run-rate forecast in December for patent and brand licensing sales to €800mln from €950mln previously.

“(The agreement) moves our relationship with Apple from being adversaries in court to business partners,” Nokia’s Chief Legal Officer Maria Varsellona said in a statement.

Under the new deal, Apple will resume carrying Nokia digital health products in its retail and online stores. The two are also exploring future collaboration in digital health initiatives.

“We are pleased with this resolution of our dispute and we look forward to expanding our business relationship with Nokia,” said Jeff Williams, Apple’s chief operating officer.

Nokia’s patents cover mobile phone technology that conserves battery life, reduces the need of hardware components, increases radio reception, helps in recovering lost devices and enables voice recognition.

Royalties from its patents represent a small slice of total revenue but licensing payments are highly profitable and Nokia’s telecoms network equipment business is suffering from sector-wide decline.The network business contributes more than 90% to overall revenues.

This may be a tactical move to focus time and energy on the Qualcomm battle.


IP getting more attention – Article in Telegraph

On February 14, 2017, in General, by Alastair Dodwell

Article in the Daily Telegraph relating to the value of IP. See Telegraph website

BOSSES at some of the world’s most innovative companies, including BAE Systems, Siemens, Philips and Bayer, have warned that intellectual property (IP) is being neglected by the business world, despite representing up to 70pc of a modern company’s value.

Research by patent specialist Aistemos has found that many opportunities are lost and innovation stifled because of systemic IP problems.

The majority of respondents claimed that boards in their industries see IP as a cost centre or a risk, with just a fraction admitting that it adds value. They also stated that most business decisions are being made with a lack of understanding of the relevant IP. When it comes to research and development, collaborations, and even mergers and acquisitions business leaders only “sometimes” have the IP data they need to make an informed decision.

IP is often vital to a company’s future. Defence giant BAE Systems, for example, has registered 250 patents over the last 17 years, ranging from lasers to hi-tech defensive armour, with 100 more in the application process.

The new report highlighted several issues including a lack of transparency over who owns what IP, and a number of incomplete and inaccurate records. Many businesses accidentally infringe others’ patents while innovation is stymied because companies are unable, or unwilling, to collaborate due to IP risk.

Joerg Thomaier, chief executive of IP at Bayer, the life sciences giant, who took part in the research, said: “Greater transparency on the patents covering a product would avoid situations where companies inadvertently infringe our patents. But for this to work, the whole industry will need to embrace the idea, and not all companies are open to greater transparency.”

Aistemos’s report warned that, with no universal method for including IP on the balance sheet, many investors were in the dark about the value of IP.

Hywel Ball, a managing partner at professional services giant EY, said: “Given that more than half enterprise value is represented by intangible assets, for some companies up to 80pc, I worry that this value is not being represented by financial statements. This means that when you look at the stock market, the real value of those companies isn’t visible.” Intangible assets, which tend to include IP, make up 53pc of the total value of the FTSE 100.

Nigel Swycher, Aistemos founder, said: “The impact of technology and innovation across business of all types, from pet food to autonomous vehicles, means that there is no business large or small that can afford not to consider the implications of IP across the entirety of the business.”


Samsung and Apple – Design wars, continued

On October 12, 2016, in Apple, News, Samsung, by Alastair Dodwell

Apple and Samsung are back in the US Supreme Court in a continuation of the design and patent battles regarding the iPhone’s design.


Back in 2010, executives from Samsung and Apple meet and the latter suggests Samsung pay $30 per phone and $40 per tablet for infringing on design patents with the iPhone and iPad. Earlier in the year, HTC agreed to pay Microsoft $5 for every Android device ever sold. Apple’s suggestion was too high for Samsung and the company declined. Then in 2011, Apple filed a patent design lawsuit against Samsung.

Apple sued Samsung the following year for “slavishly” copying the iPhone’s design. Samsung countersued for 3G patents, and filed claims in Germany, Japan, and South Korea.

The next six years involved Apple getting judges to ban Samsung devices in various countries: an iPhone and iPad sales ban in Germany that lasted a few hours, failed settlement talks, and even forcing Samsung and Google to scale back the universal search bar on the Galaxy Nexus and Galaxy S3. In the U.K., Apple also had to post a public apology that said Samsung did not copy its designs.

In 2012, however, the verdict was decided. The jury sided with Apple, awarding the U.S company $1 billion in damages. That did not stop the iPhone-maker, as it quickly followed up with another lawsuit that targeted newer Samsung devices. In 2013, the judge that presided over the first case found that the damages Samsung had to pay were calculated incorrectly. Around $450 million of the $1 billion was invalidated and a retrial kicked off later in the year.

In another blow to Samsung, the retrial earned Apple an additional $290 million in damages, bringing the total Samsung has to pay to $929 million, a little short of the original $1 billion victory. Samsung immediately appealed the decision. In December 2015, Samsung agreed to pay $548 million to Apple.

Now this case in back in U.S. Supreme Court and this week heard a specific aspect of the Apple vs. Samsung Washington, D.C. Both sides made arguments and the U.S. Department of Justice added a few comments. We expect the Supreme Court’s ruling to come some time before the court’s term ends in June 2017.

Design Patents

To understand the line of questioning shown below from the Supreme Court justices to Apple and Samsung lawyers, you need to take a look at the law and the argument in the case.

Design patents, as the name suggests, protect the unique look of a product. Utility patents protect the functional parts of a product. In the original 2012 case, Apple sued Samsung saying it copied various design patents of the iPhone. The jury ended up siding with Apple, agreeing that Samsung copied the black rectangle shape and rounded corners, the bezel, and a patent that covered the graphical layout of icons on the iPhone. The Korean giant was ordered to pay “total profits” of the phones in question.

From the court

“It seems to me that the design is applied to the exterior case of the phone,” said Chief Justice John G. Roberts Jr. “It’s not applied to all the chips and wires.”

It followed, he said, that “there shouldn’t be profits awarded based on the entire price of the phone.”

Several justices seemed to agree that the damages Samsung must pay may well be less than its total profits of about $400 million on several phones. They said the right award might be limited to profits attributable to the protected features, including the iPhone’s rounded corners and grid of icons.

But the justices seemed frustrated about how to articulate the right legal standard. Justice Anthony M. Kennedy said he did not know what jurors should be told in deciding how much companies that infringe design patents must pay.

“Neither side gives us an instruction to work with,” he said.

Justice Sonia Sotomayor echoed the point. “How do we announce the right test?” she asked.

Kathleen M. Sullivan, a lawyer for Samsung, said jurors could, for instance, hear expert testimony from accountants.

Justice Kennedy responded that such evidence could not place a value on a “stroke of genius” like the design of the Volkswagen Beetle. That analogy came up throughout the argument, with some justices arguing that the car’s design provided much of its value.

Justice Samuel A. Alito Jr. disagreed. “I can’t get over the thought that nobody buys a car, even a Beetle, just because they like the way it looks,” he said. “What if it, you know, costs, I think, $1,800 when it was first sold in the United States? What if it cost $18,000? What if it got two miles per gallon? What if it broke down every 50 miles?”

Justice Stephen G. Breyer said jurors could be given examples. “You know, wallpaper, you get the whole thing,” he said, referring to total profits. “A Rolls Royce thing on the hood? No, no, no. You don’t get all the profit from the car.”

Design patents are far less common than utility patents, which cover how products work. The Supreme Court has not heard a design patent case in over a century.

Ms. Sullivan, Samsung’s lawyer, argued that design patents are poorly suited to complex devices with many features, adding that they can give rise to disproportionate penalties.

“A smartphone is smart,” she said, “because it contains hundreds of thousands of the technologies that make it work.”

Design patents once covered household items like spoons and fireplace grates — whose design was central to the product — and a finding of infringement required the defendant to turn over all of its profits.

Several leading technology companies, including Facebook and Google, filed a brief supporting Samsung. Their brief said that “the availability of disproportionate profits from accused infringers of design patents would reduce innovation.”

Companies that sell products with distinctive designs, including Tiffany and Adidas, filed a brief supporting Apple. “The total profits rule,” the brief said, “helps to ensure that designers have the appropriate incentives and rewards to make investments in innovative designs.”

Last year, Samsung agreed to pay Apple $548 million in damages in the case, but it reserved the right to appeal to the Supreme Court. The company now hopes to recover as much as $399 million of that, representing its total profits from various models of phones that Apple said, in a lawsuit filed in 2011, infringed on its design patents.

The case before the Supreme Court is just one challenge faced by Samsung. The firm is killing its troubled Galaxy Note 7 smartphone after struggling to address reports that the device can overheat and catch fire because of a manufacturing flaw.

The three design elements at issue in this case, Samsung Electronics Co. v. Apple Inc., No. 15-777, are, in Samsung’s description, “a particular black rectangular round-cornered front face”; “a substantially similar rectangular round-cornered front face plus the surrounding rim”; and “a particular colorful grid of sixteen icons.”

Last year, the United States Court of Appeals for the Federal Circuit, a specialized court that handles patent appeals, ruled that the governing statute “explicitly authorizes the award of total profit from the article of manufacture bearing the patented design.”

The court appeared to acknowledge the possibility that “an award of a defendant’s entire profits for design patent infringement makes no sense in the modern world.” But it added that “those are policy arguments that should be directed to Congress.”

“We are bound by what the statute says, irrespective of policy arguments that may be made against it,” the court said.

The design patent law says that infringers “shall be liable to the owner to the extent of his total profit” from the sale of “any article of manufacture.”

As the case reached the Supreme Court, the two sides and the Obama administration all focused on that last phrase, agreeing that the “article of manufacture” at issue could be a component of the product rather than the entire product sold to consumers.

“The parties, actually, and the government are fairly close,” Justice Breyer remarked.

But Ms. Sullivan said the appeals court had not allowed it to make its case on what was the “article of manufacture.” Seth P. Waxman, a lawyer for Apple, responded that Samsung had litigated the case on the understanding that the entire phone was the relevant product and that it could not change its mind now.

The justices did not seem inclined to adjudicate that last dispute. “We have a hard enough question trying to figure out what the standard is,” Justice Breyer told Mr. Waxman. “Now, why can’t we just ask the lower courts to listen to your arguments and theirs, and work it out.”


If Samsung wins, it would set a precedent and affect other design patent cases. It would mean Samsung owes less money to Apple and the case would be kicked down to lower courts to decide the final amount.

If Apple wins, Samsung pays up. There would be more trials related to other design patent cases between the two. There is also a chance of a tie, thanks to the vacant seat on the Supreme Court following the death of Justice Antonin Scalia.

The ruling is expected to land some time in 2017, before the court goes out of session in June. The decision won’t impact consumers, but it will affect how future design patent disputes are handled.

On Fire

With the Samsung Galaxy 7 now removed from shelves, Samsung could do with a break.


EU launches US privacy shield

On October 10, 2016, in News, by Alastair Dodwell

The European Commission is to implement its privacy shield framework, centred around protecting the personal data of EU citizens when in the hands of US companies.


The privacy shield, agreed in February 2016, builds on the principles of the “safe harbour” agreement, which went into force in 2000. The agreement promised to protect EU citizens’ data when being transferred by US companies to their home nation, but it was struck down by the European Court of Justice in October 2015, on the back of revelations from Edward Snowden, which showed that EU data stored by US companies was not safe from illegal surveillance.

Since safe harbour was deemed invalid, the Commission has struggled to concoct a framework that would allow US companies to utilise data that meets European data protection requirements. The privacy shield agreement will operate under four basic guidelines. The first obligates the US Department of Commerce to carry out regular updates and reviews to ensure that companies are compliant with the arrangement. Any company found failing to comply will face sanctions or removal from the list of privacy shield companies.

Perhaps more crucially, given the Snowden revelations, the privacy shield’s imposes safeguard and transparency requirements on the US government, which has to provide assurances that EU personal data will not be used for surveillance. Companies will be given the opportunity to seek out redress in an effort to prevent misuse of data, and an ombudsman mechanism within the US Department of State will be created for this purpose. On a similar note, the third principle deals with dispute resolution from an individual perspective. If any individual is unable to resolve a dispute with the company accused of violating data privacy in the first instance, then the privacy shield will provide free alternative dispute resolution solutions. The relevant data protection authority from each member state can be invoked for more problematic disputes, escalating to the involvement of an arbitration mechanism, and the use of an independent ombudsperson if necessary. An annual joint review mechanism rounds out the four principles, which will monitor the functioning of the privacy shield.

Microsoft confirmed its support for the agreement, stating that it “imposes clear and strong obligations on companies”, although it did argue that the privacy shield could go further. The Commission’s vice-president for the Digital Single Market, Andrus Ansip, and the commissioner for justice, consumers and gender equality, Vera Jourova, both claimed the agreement offers a “robust framework”, to help restore the trust of EU citizens when their data is transferred across the Atlantic. However, the Commission’s own European Data Protection Supervisor, Giovanni Buttarelli, stated back in May that he believed the privacy shield did not go far enough to protect against indiscriminate surveillance. Other privacy and consumer protection groups have denounced the privacy shield as doing little to address the shortcomings of the safe harbour agreement.

Privacy International, a London-based organisation, branded the privacy shield an “opaque document” that would be a “field day” for law firms. Ultimately, it said, the basic principles “fall below what is expected to protect the rights of individuals”. The organisation drew particular attention to the inclusion of assurances from US authorities over data misuse, rather than any tangible legislative reforms. European Digital Rights, a civil and human rights association, claimed the agreement “helps nobody at all”.

The privacy shield will go into effect immediately, and US companies will be able to certify compliance from August 1st onwards. The privacy shield agreement was formally signed by EU member states last week, despite abstentions on the vote to implement the agreement from Austria, Slovenia, Bulgaria and Croatia. Representatives from all these countries were said to have doubts as to whether the agreement could adequately protect their citizens from US surveillance.

Source: Industry Briefing

EU at it agin with copyright rules

On October 7, 2016, in News, by Alastair Dodwell

The EU is proposing strict new copyright rules aimed at making it easier for musicians, TV makers and publishers to make money out of their work online.

Google could be especially hard hit by the rules, which could force both YouTube and Google News to pay out more for hosting content or showing parts of it.

Many working in newspapers and the music and film and TV industries hold Google partly to blame for lost revenues from issues such as piracy.

In particular, artists and record labels have argued that YouTube has created a “value gap” but does not fairly compensate them for the huge amount of music streamed over its platform, arguing that it hides behind “safe harbour” rules governing content uploaded by users.

The new rules, which are contained in proposals from the European commission for an updated copyright directive, would require video sites such as YouTube to quickly remove or get authorisation for copyrighted videos, and strengthen the negotiating position of rights holders.

YouTube and other sites such as Dailymotion would have an “obligation to deploy effective means such as technology to automatically detect songs or audiovisual works”, though it praises YouTube’s efforts in the area.

The directive also offers hope for news publishers, some of which have been vociferous in their criticism of firms such as Google for making money from their content without paying.

New rules will recognise “the key role press publishers play in terms of investments in and overall contribution to the creation of quality journalistic content”, providing them with a stronger foundation to make aggregators such as Google News pay for republishing all or part of their article.

The new proposals still have to be approved by the European parliament and council of ministers and are likely to take months to come into force.

The European commission also said it was looking at ways to improve enforcement of rules including involving digital advertising companies that put ads on sites that host content that violates copyright, and companies that process payments for sites that charge for access.

Google’s vice president for global policy, Caroline Atkinson, said the company disagreed with the commission’s approach.

“Innovation and partnership – not subsidies and onerous restrictions – are the key to a successful, diverse and sustainable news sector in the EU,” she wrote in a blog post.

“And for both European creators and consumers, it’s vital to preserve the principles of linking, sharing and creativity on which so much of the web’s success is built. The appropriate balance has not yet been struck, and Google is committed to playing its part in the discussions.”


Apple Wins Another Ruling Against Samsung

On September 18, 2015, in Apple, by admin

Apple Wins Ruling to Force Samsung to Change Products

Bloomberg reports: Apple Inc. won an appeals court ruling that may force Samsung Electronics Co. to stop using some features in its smartphones and tablets.

A U.S. appeals court said Apple was entitled to a narrow order that prevents the Samsung from using Apple’s slide-to-unlock, autocorrect and quicklinks features. To rule otherwise would eliminate patent rights of inventors of certain features in multicomponent devices, the U.S. Court of Appeals for the Federal Circuit in Washington said in an opinion posted on its electronic docket.

The decision could have far-reaching consequences in how disputes are resolved when it comes to complex devices, and help patent owners limit copying by rivals. The ability to block use of an invention is a powerful tool that increases the price tag when negotiating settlements.

“It’s an important precedent for Apple and any company that seeks to protect product differentiation,” said Nick Rodelli, who heads CFRA Legal Edge, a New York-based forensic accounting and legal research firm. “This broadens their moat here in the U.S. and makes it more difficult for new entrants to come into the U.S. market and rip off Apple’s features.”

For Apple, it gives the iPhone maker additional firepower when it comes to resolving this four-year-old dispute with its biggest rival. A past Apple settlement with HTC Corp. included a no cloning provision that ensured HTC’s phones didn’t look too similar to the iPhone, and the ruling Thursday helps do the same to other mobile phone makers, like China’s Xiaomi Corp., that want to enter the U.S. market.


Apple won a $119.6 million jury verdict in May 2014 from Samsung who were found to have infringed its patents for the slide-to-unlock, autocorrect and quicklinks features. Even so, the trial judge declined to issue an order forcing Samsung to remove those features from its mobile phones, saying monetary damages would be adequate.

Apple argued that, if it weren’t able to control use of its inventions, it may lose market share and its reputation as an innovator.

“The right to exclude competitors from using one’s property rights is important,” the Federal Circuit ruled in a 2-1 decision. “And the right to maintain exclusivity — a hallmark and crucial guarantee of patent rights deriving from the Constitution itself -— is likewise important.”

Samsung Supporters

Google Inc,no great surprise, HTC, LG Electronics and Rackspace Hosting Inc. were among the companies backing Samsung in its arguments. They argued in a filing with the court that a victory for Apple could allow a patent owner “to unfairly leverage its patent for competitive gain.”

The specific features had an impact on customer decisions to buy products, and that should be considered when determining whether to block use of an invention, the court said.

Samsung told the appeals court in March that none of its current models use two of the patents, and only a single product still has the autolink feature, so there’s no hardship on it, the court ruled.

“The public generally does not benefit when that competition comes at the expense of a patentee’s investment-backed property right,” Circuit Judge Kimberly Moore wrote for the majority. “This is not a case where the public would be deprived of Samsung’s products. Apple does not seek to enjoin the sale of lifesaving drugs, but to prevent Samsung from profiting from the unauthorized use of infringing features in its phones and tablets.”

iPhone ‘Copied’

Samsung is appealing the underlying infringement verdict as well; that case is pending before the Federal Circuit.

Apple won an earlier case against Samsung over the design of the iPhone which it said was copied. The Federal Circuit in May upheld $548 million worth of damages in that case. A partial trial must be held to determine the exact amount. In a Sept. 11 filing with the court in San Francisco, both sides said they were willing to work with a mediator to resolve the case, with Apple going so far as to suggest binding arbitration.

The case ruled on today is Apple Inc. v. Samsung Electronics Inc., 14-1802, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Apple v. Samsung, 12cv630, U.S. District Court for the Northern District of California (San Jose).


Reuters Reuters reports that a federal judge has thrown out a $532.9 million award against Apple Inc and ordered a new trial on damages, in a case where a jury found that the iPhone maker’s iTunes software infringed three patents owned by a Texas company.

In a decision on Tuesday, U.S. District Judge Rodney Gilstrap in Tyler, Texas, said jurors who on Feb. 24 awarded the damages to Smartflash LLC because of Apple’s willful infringement might have been confused by his instructions on how to properly calculate royalties.

Apple had argued that the damages were too high because jurors might have improperly considered the entire market value of the products, rather than distinguishing between patented and unpatented features.

Gilstrap said his jury instructions were legally correct but not applicable to the facts of the case, and “may have created a skewed damages horizon for the jury.”

He set a new trial only on the issue of damages for Sept. 14 in Tyler, where Smartflash is based.

Bradley Caldwell, a lawyer for Smartflash, did not immediately respond on Wednesday to requests for comment.

Apple declined to comment on Gilstrap’s decision, but said the case showed why Congress should try to curb litigation by Smartflash and similar companies whose business models depend in part on lawsuits to enforce their patents.

“We refused to pay off this company for the ideas our employees spent years innovating,” Apple said.

Shares of Apple were down 1.9 percent at $123.36 in afternoon Nasdaq trading.

Smartflash accused Apple in a May 2013 lawsuit of infringing patents for accessing and storing songs, videos and games, enabling the Cupertino, California-based company to sell more of its iPhone, iPad and iPod Touch products.

The lawsuit said Patrick Racz, a co-inventor of Smartflash’s patents, had discussed some of his ideas in 2000 with officials of a European company, including Augustin Farrugia, who later became a senior director at Apple.

Smartflash originally sought damages of $852 million.

The trial took place in the federal court for the Eastern District of Texas, a favorite for lawyers representing patent holders because of its reputation for high damages awards.

The case is Smartflash LLC et al v. Apple Inc et al, U.S. District Court, Eastern District of Texas, No. 13-00447.



The sale of patents owned by the Rockstar Consortium of companies could bring a windfall of $392 million in additional cash to Apple’s March quarter, estimates from one analyst predict.

Rockstar logo

Apple originally paid the lion’s share for a series of patents purchased by the companies acquired from Nortel. The iPhone maker accounted for 58 percent, or $2.6 billion, of the $4.5 billion that was spent as part of the deal.

RPX completed the purchase of Rockstar for $900 million earlier this year, shedding 4,000 patents and ending ongoing lawsuits in the wireless industry. Following the sale, consortium member BlackBerry reported a gain of $115 million, and the Canadian smartphone maker originally paid $770 million — or 17 percent — of the original purchase.

Using these figures as a baseline, analyst Maynard Um of Wells Fargo calculated that Apple could see a gain of about $392 million in the March quarter. That would equate to about 5 cents in the company’s earnings per share, he said.

Um also sees the sale of the Rockstar patents as an indication of a less litigious wireless industry, which he sees as a positive for everyone involved. Previously, mobile companies were engaged in a broad series of lawsuits that spanned across the globe.

Exactly how much Apple made from the Rockstar patent sale will likely be revealed on 27th April when the Apple is scheduled to reveal the results of its second fiscal quarter of 2015.


Apple – back in the courts, again

On February 27, 2015, in Apple, News, by admin

Hot on the heels of losing a lawsuit yesterday with a $530 million payout to Smart Flash LLC, Apple has been hit with additional lawsuits from Smart Flash and from Ericsson.

Apple has just been ordered to pay $532.9 million after a federal jury in Texas found that its iTunes software infringed three patents owned by patent licensing firm Smartflash LLC.

Though Smartflash had been asking for $852 million in damages, Tuesday night’s verdict was still a blow to Apple.

The jury, which deliberated for eight hours, determined Apple had not only used Smartflash’s patents without permission, but did so willfully.

Apple, which said it would appeal, said the outcome was another reason reform was needed in the patent system to curb litigation by companies that don’t make products themselves. These non practixing enterties are sometimes refered to as Trolls.

“We refused 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,” Apple said in a statement.

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 recognizes Apple’s longstanding willful infringement,” Brad Caldwell, a lawyer for Smartflash, said in an email. – No surprise here as $500 big ones should make him verry happy.

The trial was held in Tyler, which over the past decade has become a focus for patent litigation and which happens to be the home of Smart Flash’s office.

It was also in Tyler federal court that a jury in 2012 ordered Apple to pay $368 million to VirnetX Inc for patent infringement. A federal appeals court later threw out that damages figure, saying it was wrongly calculated.

Apple tried to avoid a trial by having the lawsuit thrown out. But U.S. District Judge Rodney Gilstrap, who presided over the case, ruled earlier this month 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.

Sweden calling

Ericsson on Friday announced that it will sue Apple in the U.S., claiming Apple infringed 41 of its patents including both standards essential and other non standards essential but critical implementation patents such as the design of semiconductor components, user interface software, location services and applications, as well as the iOS operating system.

In a report published today, JP Morgan analyst Rod Hall discussed Apple latest lawsuit initiated by Ericsson for patent infringement.

Hall noted that Ericsson filed a suit in January to let the court determine if its patents licensing offer to Apple complied with the fair, reasonable and non-discriminatory (FRAND) licensing terms. Apple refused the offer to let the courts decide, resulting in Ericsson now suing Apple and requesting an exclusion order against Apple’s products for infringing on its patents.

Hall further explained that “Apple had also filed a lawsuit in the US to seek judgments that few LTE patents declared essential by Ericsson are, in fact, not essential and not infringed by Apple; and ii) if these LTE patents are infringed by Apple to determine an appropriate royalty base and royalty rate.”

What happens now?

Despite the filing of mutual lawsuits, Hall wrote that Ericsson and Apple were negotiating with each other, but talks have broken down.

Hall speculated that Apple’s filed suit was intended to invalidate some 4G patents held by Ericsson and that Apple chose the “weakest patents” to get some negotiating leverage over Ericsson. On the other hand, Ericsson used its “strongest patents” to make sure it receives an exclusion order which would force Apple to negotiate.

“Ericsson has a very strong wireless patent portfolio and we believe it is impossible for Apple to overturn the validity of their key patents,” Hall argued. “Apple’s strategy would be to seek to reduce the royalty Ericsson is demanding which is likely a difficult task because Ericsson likely does not use Apple innovations which could have resulted in a lower royalty fee if both companies signed a cross licensing agreement.”

Hall concluded there is a potential upside to Ericsson’s IPR licensing revenue if it prevails in the lawsuit. Under a “worst case” scenario, the analyst stated that Ericsson will get the same royalties from Apple that it got in its expired licensing deal.


The latest court battle between Apple and Samsung continues, with Samsung appealing against the $930M it was ordered to pay Apple for patent infringement. Samsung is arguing that the amount awarded was “excessive and unwarranted.”

It’s of course not the first time that the sum awarded has been disputed. Apple was initially awarded $1B in damages, with $450M of that later cut and a retrial required to determine a revised sum. The retrial awarded Apple $290M instead for that element of the case, giving Apple a revised total award of $930M … Confused?

An appeals court is due Thursday to hear arguments from both sides in Samsung’s appeal of the verdict from the first Apple-Samsung case. Samsung argues that much, if not all, of that amount should be thrown out, saying the verdict was excessive and unwarranted.

Apple, for its part, says most of the issues Samsung raises are factual matters for the trial courts rather than legal questions worthy of appellate review.

“Samsung seeks to belittle Apple’s intellectual property rights and particularly Apple’s design patents, though it tellingly does not challenge the design patents’ validity,” Apple writes in its brief in the case. “Samsung also tries to downplay the extent of its mimicry, but overwhelming evidence demonstrated that Samsung faced a ‘crisis of design’ and addressed it with shameless copying.”

Both sides have also lined up “friend of the court” filings from various third parties that agree with their position.

A brief was filed by 27 law professors on Samsung’s behalf, while Apple’s position has the backing of companies such as Oakley, Kohler and Novo Nordisk — which endorse strong design patent protections — as well as various designers and design educators.

Of course, this is just one of the many legal battles between the two companies. Apple V Samsung / Android continues.