By Angela Chen
A Texas jury ordered Apple Inc. to pay $532.9 million after
finding that the company's iTunes software infringed three patents
of privately held Smartflash LLC.
A representative for Apple wasn't immediately available
Wednesday for comment. Shares of Apple edged down about 0.4% in
premarket trading.
Smartflash owns three patents related to data storage and
payment management. The Tyler, Texas, company alleged that, in
2000, patent co-inventor Patrick Racz shared his ideas with
Augustin Farrugia, then a member of the tech company Gemplus
International SA. Mr. Farrugia is now a senior director at
Apple.
Smartflash, which doesn't make its own products, claimed that
Apple violated the patents by using the technology in managing apps
sold through its iTunes store, such as "Coin Dozer Pro" developed
by Game Circus LLC and "Grub Guardian" and "WizardBlox," developed
by Kingsisle Entertainment Inc. The latter two companies had been
defendants before being dismissed from the case.
Smartflash had sought $852 million in damages.
The Texas jury decided that Apple had willfully infringed all
three patents, and that Apple hadn't proven the patents were
invalid.
"I would expect Apple to say they will appeal as part of Apple's
standard operating procedure," said Brad Caldwell, lead counsel for
SmartFlash. "However, Smartflash believes the facts and the law
support the jury's verdict."
Smartflash has filed similar cases against Google Inc. and
Samsung Electronics Co.
Write to Angela Chen at angela.chen@dowjones.com
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