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Patents Businesses The Courts Apple Technology

Court Rules Apple Doesn't Owe Patent Troll $503 Million (cultofmac.com) 29

An appeals court ruled that Apple doesn't have to pay $503 million to VirnetX, a company often accused of being a patent troll. The court didn't reverse the original patent-infringement decision though, it just said the amount must be recalculated or a new trial held. Cult of Mac reports: VirnetX Holding Corp is sometimes referred to as a patent troll because it doesn't produce any products. It just collects patents, forces other companies to pay licensing fees on them, or files lawsuits when it thinks its patents have been infringed. VirnetX and Apple have gone head-to-head multiple times over the years. In this latest case, the iPhone maker was ordered to pay $302.4 million because FaceTime infringes on two patents. This was later increased to $439 million.

The figure had apparently grown to $503 million before the U.S. Court of Appeals for the Federal Circuit rejected that amount, according to Bloomberg. In its decision, the court decided that Apple can't re-argue the question of whether VirnetX's patents are valid. But the company does get a chance to lower the penalty.

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Court Rules Apple Doesn't Owe Patent Troll $503 Million

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  • When Apple originally released FaceTime, it used an innovative network design that did not require a central server. Though Apple-to-Apple only in its first release, this design would allow Face Time to be implemented on any telephone network as time went on.

    East Texas awarding the patent to VirnetX meant that Face Time had to switch to a central server implementation. It remains Apple-to-Apple, therefore little-used, to this day.

    • My family uses FaceTime. Who says it's not used?
      • by SeaFox ( 739806 )

        My family uses FaceTime. Who says it's not used?

        Nobody. The person you're replying to said "little used". Apparently you can be "Way Smarter" and stupid at the same time. How big is your family, again? [yourlogicalfallacyis.com]

        • I bet you are an utter delight at social gatherings. Do you also correct people who forget to start referring to events as happening "yesterday" as soon as it is past midnight?
      • I think the 'little used' in the OC refers to the decentralized network design, not FaceTime itself.
    • The whole idea of patents is to give a company a head start. A small company can thus compete with the big boys if they come up with a unique patent-able idea. Patents should only be valid if the holder is either producing a product or has one in the works. This would mean a patent holder can sell the patent to a manufacturer who can then enforce it but just holding a patent wouldn't be worth anything.

      • by tap ( 18562 )

        Profitably selling a product involves many things beyond developing the technology. Manufacturing, supply chain, distribution, advertising, branding, etc. There are companies that can create innovative technology but don't have the size or ability to execute or compete everything else. All our phones use ARM CPUs. But ARM doesn't make or sell any CPUs. They just license IP to CPU makers. Does that not count?

        The real problem here is patents are supposed to further promote the progress of science and us

        • by jon3k ( 691256 )
          That's a reasonable point and something I never considered. Maybe you have to prove a good faith effort to attempt to actually have your patents used or monetized somehow? Also, when all you do is buy up other patents, but don't create any of the patented technologies directly, that should be some kind of red flag as well.
          • That's a reasonable point and something I never considered. Maybe you have to prove a good faith effort to attempt to actually have your patents used or monetized somehow? Also, when all you do is buy up other patents, but don't create any of the patented technologies directly, that should be some kind of red flag as well.

            Just close the Court of the Eastern District of Texas. That will fix about 90% of the issues with Patent Trolls.

        • by sjames ( 1099 )

          Perhaps a better test would be that you must show a good faith effort to either go into production or to license or sell the patent to someone who has that intent. The latter must include proactive effort, not just slapping a "for sale" sticker on it and filing it away in the "display department". No more using them like landmines waiting for someone to stumble over them.

        • by tlhIngan ( 30335 )

          Profitably selling a product involves many things beyond developing the technology. Manufacturing, supply chain, distribution, advertising, branding, etc. There are companies that can create innovative technology but don't have the size or ability to execute or compete everything else. All our phones use ARM CPUs. But ARM doesn't make or sell any CPUs. They just license IP to CPU makers. Does that not count?

          The real problem here is patents are supposed to further promote the progress of science and useful a

      • > The whole idea of patents is to give a company a head start. A small company can thus compete with the big boys if they come up with a unique patent-able idea.

        Yep.

        > Patents should only be valid if the holder is either producing a product or has one in the works. This would mean a patent holder can sell the patent to a manufacturer who can then enforce it but just holding a patent wouldn't be worth anything.

        Yep, licensing the patent to a company that manufacturers and distributes things in that indus

        • by micheas ( 231635 )

          Although the period of the greatest innovation in the US was when we didn't recognize foreign patents and copyrights.

          I'm not sure that the entire premise of patents actually works. I mean if you look at the bureaucracy of large corporations you almost wonder if that shouldn't be enough of an advantage for small companies.

        • by tap ( 18562 )

          That's what Apple did. They sold someone else's patented invention without licensing the patent.

          Virnetx didn't invent anything anymore than you just invented a hammer that doesn't hit thumbs.

          "hammer that doesn't hit thumbs", if it had to do with computers, would alone be sufficient to have created a patent-able invention, and that is what virnetx and their ilk are exploiting.

        • Patent trolls suck. One thing that sucks about patent trolls is that although it's just a few companies, there is no obvious fix that doesn't have major unintended consequences.

          Make them release or otherwise reasonably distribute a functional product that utilizes that patent. "Reasonable" being left to the interpretation judge who says "You sent one copy of your product to a gas station in Horseshoe Bend, Arkansas, patent nullified."

        • > there is no obvious fix that doesn't have major unintended consequences

          Right. All wrong theories have corner-cases that are insurmountable. Cycles and Epicycles seemed pretty good but nobody could ever get them quite right. It seemed risky and insane to dismantle such a useful system and rebuild one based on Keplerian physics, but all the corner-cases were solved by doing so (at least at the time, before modern instruments demanded Relativity).

          The "Intellectual Property" theory of legal fiction is i

      • by AmiMoJo ( 196126 )

        Design patents like Apple's infamous rounded corners shouldn't be valid either. They should be purely for functional, non-obvious stuff.

        • Design patents like Apple's infamous rounded corners shouldn't be valid either. They should be purely for functional, non-obvious stuff.

          Was that particular patent a Utility Patent or a Design Patent?

          If it was a Design Patent, then that is exactly what they are for; to protect a Product's "look".

          Because of this, Design Patents are short-lived, being non-renewable. Design Patents last a maximum of seven years; whereas a Utility Patent (a "real" patent) can be renewed up to a maximum of 21 years. Big difference.

      • "Has one in the works" is too exploitable. I could have an empty folder on my desktop and say "It's in the works". Patents should come with a tangible product to even be considered in the first place.
      • That's not what patents are (or should be) about. Patents are meant to protect a risky investment. For example medicine research or trying a fusion reactor. Nobody would invest in such things if somebody else could just run away with the resulting knowledge. Such risky investments basically do not exist in software. That's why most countries do not consider software to be patentable. It's just text, you know.

        • And if I spend 20 years on a fusion reactor... then give up because I don't know anything about nuclear fusion reactors, do I get to harass anybody that does come up with a working design? There's risky investments... sure, because all investments have risk, but then there's holding back the progress of human civilization so I can snort coke off a hooker's tits when I win the patent jackpot.
  • I used to use a configuration file to look up addresses so that I could create a connection to them as far back as I can remember. Of course, back in the 1960's and 1970's there were no computers involved and the "configuration file" was called a "phone book" and the "address" to which one connected was called a "telephone number", and the "secure channel" was created over the public-switched-telephone-network by dialing the telephone number on this funky thing called a "telephone" ... BZZZZZT zwiiiit da d

    • by DRJlaw ( 946416 )

      I used to use a configuration file to look up addresses so that I could create a connection to them as far back as I can remember.

      You're a genius! You should have pitched your idea to Apple a few years ago and convinced them to use your invalidity defense. That way they'd have saved themselves a few hundred million dollars and you'd have earned a handsome fee.

      Or perhaps you've missed a few things...

  • Real artists ship.

  • Capitalism: Making money with the work of others.

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