Jul 18, 2019 | Updated: 10:03 AM EDT

Apple Loses Patent Case Against Smartflash And Is Asked to Pay $532.9 Million in Fines

Feb 25, 2015 05:45 PM EST

Apple iTunes
(Photo : Apple)

Though many believed that technology powerhouse Apple would prevail against what the company is calling a "patent troll", this week Apple was ordered to pay $532.9 million in fines as a result of patent infringements. And while the petitioner, Smartflash won't receive its full $852 million in damages, the ruling is setting a pretty hefty precedent for future lawsuits against the technological innovator.

Originally filed in May 2013, the original lawsuit claimed major patent infringements on behalf of Apple's iTunes software regarding data storage and access systems. Pointing to infringements in iOS applications developed in particular by Game Circus and KingsIsle Entatertainment, Smartflash sought a total of $852 million in damages. But Apple claimed that the three patents in question were worth no more than $4.5 million in total. 

"Smartflash makes no products, has no employees, creates no jobs, has no U.S. presence, and is exploiting our patent system to seek royalties for technology Apple invented" Apple's spokesperson says. "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."

The Texas-based Smartflash was launched at the turn of the 21st century by inventor Patrick Racz, and is predominantly comprised of licensing seven patents issued between 2008 and 2012 regarding data storage and access systems software. But while the lengthy proceedings against Apple took nearly two years to reach a decision, this isn't Smartflash's first case in court. In fact, the company and its inventor have also sued major technology brands such as Samsung, Amazon,  HTC, and even Google on similar bases. 

According to sources witness to the court case Apple argued that they never used the patents in questions, and even sought to invalidate the patents claiming that Smartflash is nothing but a patent troll. But in the end, the jury decided against Apple, granting Smartflash a hefty settlement worth far more than the value of each of the individual patents.

"Ultimately, the jury saw through Apple's arguments and reached the right result" Smartflash's attorneys with Caldwell, Cassady & Curry say. "The jury's verdict provides well-deserved and long-overdue recognition."

But while the jury's decision was rendered in favor of Smartflash, the jury is still out in the court of public opinion. And with the major influence that Apple has on the industry, something tells us that if the case were tried again, the verdict may not be the same.

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