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.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: patent trolls, patents
Companies: apple, google, virnetx, vringo
Reader Comments
Subscribe: RSS
View by: Time | Thread
Sad but true, broken laws
[ link to this | view in thread ]
[ link to this | view in thread ]
Karma's a bitch
Both companies do enough patent trolling themselves and it is nice to know that they can fall victim to it as well. The only way there will be any chance of reforming the broken system is when the large corporations are losing vast sums of money because of it.
[ link to this | view in thread ]
That quote in and of itself demonstrates that this is a patent troll that knows nothing of actual invention or software development, as well as the courts general ignorance.
Anyone who can trot out an asinine statement like that should immediately have their patents invalidated.
Not only is it a legal necessity that software developers do not look up patents in order to avoid 'willful' infringement - it would be insane!
If you had to trawl the patent database full of legally jargonised crap every time you wanted to solve a problem you'd probably not only lose the will to develop anything, you'd lose the will to live.
[ link to this | view in thread ]
Re:
[ link to this | view in thread ]
Lol change one word of that quote and itbecomes a defense for apple
[ link to this | view in thread ]
impact?
Do you observe anything like that in the Valley?
[ link to this | view in thread ]
[ link to this | view in thread ]
Re: Karma's a bitch
When the public realize that they are bearing the cost of patents and litigation they might put pressure on the lawmakers to change the system.
[ link to this | view in thread ]
The Apple doesn't fall far from the tree.
Personally, I hope these large businesses sue each other out of existence so small businesses can finally have a chance.
[ link to this | view in thread ]
to be fair to Vringo
If those patents do infringe, accepting current laws, then I commend the jury for awarding an amount that recognises the infringement, but is small enough to deter other such suits.
[ link to this | view in thread ]
and to be fair to Apple.
[ link to this | view in thread ]
Re: The Apple doesn't fall far from the tree.
Second, this company was a spinoff of a patent trolling organization and figured it could go to the richest company in the nation for a cash grab prize on a patent the doesn't exist in hardware. Furthermore, FaceTime is a secured Peer2Peer connection and not a VPN. So basically this case should have not even cost Apple more than $10,000 in legal fees had the jurors had actually done their jobs.
[ link to this | view in thread ]
East Texas again...
The patent system is broken and East Texas is the absolute best place in the world for patent trolls. Has there ever been a patent troll who lost a case in East Texas? I doubt it. Going to East Texas guarantees a win.
[ link to this | view in thread ]
Re: to be fair to Vringo
As an additional bit of crazy regarding the company you're trying to defend, that initial $696 million they were asking for? That's over twice the company's market value, making it insanely obvious this had nothing to do with recouping lost profits, and everything to do with trying to use the legal system to shake down other companies of as much money as they could get away with.
[ link to this | view in thread ]
Re: to be fair to Vringo
[ link to this | view in thread ]
Re: East Texas again...
[ link to this | view in thread ]
Re: Re:
I get your joke though :P
[ link to this | view in thread ]
[ link to this | view in thread ]
Re: East Texas again...
[ link to this | view in thread ]
Re:
[ link to this | view in thread ]
[ link to this | view in thread ]
Re: to be fair to Vringo
1. actually invented the technology
2. had working example in use in commerce
3. got a reasonable award based on the volume of usage
#1 yeah, that's ridiculous.
#2 actually makes sense.
[ link to this | view in thread ]
Re:
If developers had to do this, then software development would literally cease to exist.
[ link to this | view in thread ]
Re: Re: The Apple doesn't fall far from the tree.
Please explain the difference. The VPN I use (OpenVPN) is a VPN, but is also implemented as a "secured Peer2Peer connection".
[ link to this | view in thread ]
Re: impact?
First, there are other places that are equally good in terms of attracting VC money, but have a substantially lower cost associated with them (Silicon valley is an expensive place to be).
Also, more people are realizing that VC money comes with some major, potentially business-killing downsides and are avoiding it.
[ link to this | view in thread ]
Re: impact?
Do you observe anything like that in the Valley?
I don't think it's quite reached that stage entirely, but it is absolutely happening at the margins. I know of a bunch of companies in Europe and Asia who won't enter the US market for fear of a patent suit.
[ link to this | view in thread ]
Re:
I think the best thing would be to have patents that are real not stupid and obvious, like apple with there round edges and snap to screen.
I fear that all these patent cases will be used to weaken the small business owner who comes up with ideas and cannot or do not get paid for there innovations.
Maybe there should be a pot of money from every device, say $20 that is used to pay for anyone that believes there patent is being used, give a reasonable time for them to put a claim forward say 6 months and that is it.
[ link to this | view in thread ]
Re: Re: Re: The Apple doesn't fall far from the tree.
[ link to this | view in thread ]
Re: Re:
[ link to this | view in thread ]
Re: Re: impact?
The only particularly dangerous part in that is that almost nothing is standardized in some countries which means that there would be a safety hazard involved.
I wrote an amazing story/post a while back about how a certain gas compressor piston broke and the company that made/copied it in China had given bogus warranty information giving a company my uncle retired from a hard time for almost a year.
[ link to this | view in thread ]
feed the trolls
Let the trolls feast on the big offenders, the more the merrier, until the big players get sick enough of it to ask for a better system.
[ link to this | view in thread ]
Re: Re: to be fair to Vringo
[ link to this | view in thread ]
Second, no country that I am aware of says "if you invent it on your own you don't infringe". That idea is preposterous. Arguing the case should have been thrown out on those grounds isn't an argument that the patent system is broken but rather that there should be no patent system.
Well done techdirt - once again showing that if you read anything about patents on the internet from a techish site its going to be written from the point of view of ignorance.
[ link to this | view in thread ]
more dissembling by Masnick
Call it what you will...patent hoarder, patent troll, non-practicing entity, shell company, etc. It all means one thing: “we’re using your invention and we’re not going to pay or stop”. This is just dissembling by large invention thieves and their paid puppets to kill any inventor support system. It is purely about legalizing theft. The fact is, many of the large multinationals and their puppets (some say Masnick is one) who defame inventors in this way themselves make no products in the US or create any American jobs and it is their continued blatant theft which makes it impossible for the true creators to do so. All they know about patents is they don't have any.
It’s about property rights. They should not only be for the rich and powerful. Show me a country with weak or ineffective property rights and I’ll show you a weak economy with high unemployment. Does that remind you of any present day country?
Prior to eBay v Mercexchange, small entities had a viable chance at commercializing their inventions. If the defendant was found guilty, an injunction was most always issued. Then the inventor small entity could enjoy the exclusive use of his invention in commercializing it. Unfortunately, injunctions are often no longer available to small entity inventors because of the Supreme Court decision so we have no fair chance to compete with much larger entities who are now free to use our inventions. Essentially, large infringers now have your gun and all the bullets. Worse yet, inability to commercialize means those same small entities will not be hiring new employees to roll out their products and services. And now some of those same parties who killed injunctions for small entities and thus blocked their chance at commercializing now complain that small entity inventors are not commercializing. They created the problem and now they want to blame small entities for it. What dissembling! If you don’t like this state of affairs (your unemployment is running out), tell your Congress member. Then maybe we can get some sense back in the patent system with injunctions fully enforceable on all infringers by all inventors, large and small.
Those wishing to help fight big business giveaways should contact us as below and join the fight as we are building a network of inventors and other stakeholders to lobby Congress to restore property rights for all patent owners -large and small.
For the truth about trolls, please see http://truereform.piausa.org/default.html#pt.
Masnick and his monkeys have an unreported conflict of interest-
https://www.insightcommunity.com/cases.php?n=10&pg=1
They sell blog filler and "insights" to major corporations including MS, HP, IBM etc. who just happen to be some of the world’s most frequent patent suit defendants. Obviously, he has failed to report his conflicts as any reputable reporter would. But then Masnick and his monkeys are not reporters. They are hacks representing themselves as legitimate journalists receiving funding from huge corporate infringers. They cannot be trusted and have no credibility. All they know about patents is they don’t have any.
[ link to this | view in thread ]