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.
The Cupertino, Calif., tech giant vowed to appeal the
verdict.
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.
The jury found that Apple had willfully infringed all three
patents, and that Apple hadn't proven the patents were invalid.
Smartflash had sought $852 million in damages.
"Smartflash makes no products, has no employees, creates no
jobs, has no U.S. presence, and is exploiting our patent system to
seek royalties for technology Apple invented," said an Apple
spokesperson, who added that the company plans to appeal the jury's
decision.
"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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