Apple, Google Lose Big Patent Cases To Trolls
from the but-of-course dept
While Apple and Google (or their proxies) are fighting it out on a number of big patent battles, both companies (and basically every other successful tech company) are still facing a whole bunch of troll lawsuits. Jury verdicts came down in two such cases this week, with the big one being Apple losing to VirnetX in East Texas, and being told to pay a whopping $368.2 million. Just as a point of reference, VirnetX admitted in court that in the first half of 2012 it made a grand total of $36,000. And now the jury thinks it deserves $368.2 million? The patents in question (which can be seen here) cover some concepts around virtual private networks. The company, a spinout of secretive government contractor behemoth SAIC, claims that Apple’s Facetime product infringes.
Apple, of course, claims that it doesn’t infringe, leading VirnetX’s lawyer to make a truly bizarre statement:
“For years Apple refused to pay fair value for the VirnetX patents,” Doug Cawley, a lawyer with McKool Smith in Dallas who represents VirnetX, said in closing arguments. “Apple says they don’t infringe. But Apple developers testified that they didn’t pay any attention to anyone’s patents when developing their system.”
In a sane world, the fact that Apple clearly did not copy or rely on these patents for its offering should be enough proof to dump the case. Unfortunately, our broken patent system still refuses to recognize a true independent inventor defense — leading lawyers to make statements like the one above, in which they gleefully cheer on the fact that they are blocking companies from innovating on their own. Shameful.
Of course, given Apple’s own aggressive patent litigation strategy, many probably won’t have much sympathy for the company here. And, indeed, there is a “live by stupid patent litigation, die by stupid patent litigation” schadenfreude in seeing this result. But, no matter what, it’s another example of the patent system gone haywire.
The other verdict came out of Eastern Virginia, rather than Eastern Texas, which perhaps explains why the verdict, while silly, is not quite as silly. It involves Vringo, who was in a patent infringement case against Google, AOL, IAC and Gannett. The original patents were actually from a troll called Innovate/Protect Engine (I/P Engine), but somewhere along the way Vringo bought them. The ruling here did find infringement, but the award to Vringo was much lower than what it was asking for. In the tradition of crazy verdicts (like the one above) Vringo had asked for $696 million combined from the companies. However, the jury here awarded $30 million. Perhaps they should have filed in East Texas, since the juries there seem to have no connection to reality when it comes to the award numbers.
These cases are quite similar to pretty much every other patent troll case out there. Tragically, these kinds of stories are becoming so common that they barely feel like news any more, other than as a painful reminder of just how much money is being absolutely squandered on ridiculous lawsuits like this, where any award seems to go to non-productive operations, rather than companies who actually bring products to market.
Both cases will likely be appealed. In the Apple case, Apple has already filed for a motion for judgment as a matter of law, which is a way to effectively ask the district court judge to overrule the jury — a tactic unlikely to get very far in this case. Either way, it’s going to be a few years before the various appeals are sorted out in these cases.