Apple ordered to pay $533 million in iTunes infringement lawsuit

The tech giant must cough up roughly half a billion after being found guilty of using Smartflash patents without permission.
Written by Charlie Osborne, Contributing Writer
Roy Zipstein | Apple

Apple has been ordered to pay $533 million in damages after being found guilty of infringing patents owned by Smartflash.

In a federal court based in Texas, this week the iPad and iPhone maker was ordered to pay a total of $532.9 million to patent licensing firm Smartflash. After eight hours of debate, Apple was found to have infringed upon three patents owned by Smartflash and through various applications and iTunes music software.

As reported by Reuters, the patents in question are related to accessing and storing data, digital rights management (DRM) and payment systems.

The licensing company filed the lawsuit against Apple in 2013 (.PDF). The original complaint states:

"In committing these acts of infringement, Apple acted despite an objectively high likelihood that its actions constituted infringement of at least one valid patent, and Apple actually knew or should have known that its actions constituted an unjustifiably high risk of infringement of at least one valid and enforceable patent."

In this, the Texan jury agreed -- after deciding Apple not only used the patents without permission, but did so "willfully," according to the news agency.

The complaint also says that co-inventor of the patents, Patrick Racz, met with then-Gemplus executive Augustin Farrugia in around 2000 to discuss the technology. Farrugia subsequently joined Apple as a Senior Director.

Smartflash has also attempted to take Google, Samsung and HTC (.PDF) to court for allegedly infringing upon patents related to data storage and access. According to the Smartflash website, the company's technology is used in products and services including smartphones, game consoles, set-top boxes, netbooks, app stores and smart television sets.

The licensing firm originally asked for $852 million in damages. Apple attempted to have the case thrown out of court by arguing the patents were too basic to deserve intellectual property rights, but presiding US District Judge Rodney Gilstrap disagreed.

Apple plans to appeal the ruling. In a statement to Bloomberg, spokeswoman Kristin Huguet said:

"Smartflash makes no products, has no employees, creates no jobs, has no US presence, and is exploiting our patent system to seek royalties for technology Apple invented. 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."

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