Apple wins partial victory over patent troll Optis, but billions still at stake

Apple has won a partial victory over patent troll Optis, when a $506M award was reduced to $300M in a retrial over damages.

However, the battle between Apple and Optis continues, as the latter continues attempts to claim as much as $7B from the iPhone maker …

Background

Optis – a group of companies comprising PanOptis Patent Management, Optis Cellular and Unwired Planet – purchased five LTE patents from Panasonic, Samsung and LG during the period 2014 to 2017. Companies which buy patents for things they didn’t invent, with the sole purpose of trying to claim far higher license fees than were charged by the original owner, are known as patent assertion entities, or patent trolls.

The patents in question are standards-essential ones, meaning that it’s impossible to make an LTE device without incorporating the patented technology. This means that licenses should be sold on FRAND terms: Fair, Reasonable, And Non-Discriminatory. The problem with this, however, is that there is no legal definition of what FRAND means, resulting in court battles when a patent owner considers their terms to be FRAND and a licensee doesn’t.

The Eastern District of Texas is known to favor patent trolls over licensees, hence many lawsuits being brought there. This included Optis’s claim against Apple.

Apple argued that the patents were invalid, but failed to persuade a jury, which awarded Optis $506M a year ago. Apple appealed, and a federal judge threw out the award, ruling that a new damages-only trial should be held . That is, the ruling that Apple had infringed the patents would stand, but a new jury would decide on a revised amount.

Patent troll Optis sees award cut

Bloomberg reports that the new jury reduced the award to $300M.

Apple Inc. was told to pay $300 million in royalties after a retrial in a patent dispute over wireless technology used in its iPhones and other products, part of a global fight with a company that says it owns patents on the LTE cellular standard.

The jury in Marshall, Texas, said PanOptis Patent Management and its Optis Cellular and Unwired Planet units were owed that amount as a lump sum to cover past and future use of the technology.

Billions still at stake

That doesn’t end the matter, however. Optis is still going after Apple for far larger sums in other countries. One particular risk for Apple is the UK court battle. The country’s Supreme Court recently ruled that any amount awarded by a UK court would apply worldwide.

Apple understandably said that this was wholly unreasonable, and claimed that it would quit the UK market rather than pay an excessive sum. The judge in that case was skeptical, but Apple’s lawyer insisted that this option was on the table.

Mr Justice Meade [said] ‘There is no evidence it is even remotely possible Apple will leave the UK market?’

Apple’s lawyer Marie Demetriou replied: ‘I am not sure that is right… Apple’s position is it should indeed be able to reflect on the terms and decide whether commercially it is right to accept them or to leave the UK market. There may be terms that are set by the court which are just commercially unacceptable.’

As we noted at the time, this again underlines the need for global patent reform, such that overly-broad patents are invalidated, and patent trolls are not able to massively increase license fees for standards-essential patents.

Photo: Youssef Sarhan/Unsplash