A federal jury found Apple’s iTunes software infringed three patents owned by Texas-based patent licensing company Smartflash. Smartflash wanted $852 million in damages.
The jury deliberated for eight hours and said that Apple not only used the Smartflash patents without permission, but also did so wilfully.
Apple claimed the outcome was another reason why reform is needed in the patent system to curb litigation by companies that do not make products themselves, such as Smartflash. Although it has done rather well itself by patenting the rounded rectangle, which it did not really invent.
“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,” an Apple spokeswoman said in a statement to Reuters.
Smartflash sued Apple in May 2013 alleging the Cupertino, California-based company’s iTunes software infringed its patents related to accessing and storing downloaded songs, videos and games.
The trial was held in Tyler, the hub of the East Texas region, which over the past decade has become a focus for patent litigation in the United States. Some of the biggest jury verdicts have been awarded in the district. Smartflash is also based in Tyler.
Apple tried to avoid a trial by having the lawsuit thrown out. But earlier this month U.S. District Judge Rodney Gilstrap, who presided over the case, ruled that the Smartflash’s technology was not too basic to deserve the patents.
Apple argued that it did not infringe the patents and asked the jury to find they were invalid because previously patented inventions covered the same technology.
Smartflash’s suit said that in 2000, the co-inventor of its patents, Patrick Racz, met with a man named Augustin Farrugia to discuss the patents’ technology. Farrugia, the complaint said, later joined Apple and became a senior director there.