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Jury orders Apple to pay $533 million in iTunes patent case

A federal jury finds that Apple infringed on patents owned by licensing firm Smartflash that are tied to digital rights management, data storage and payment systems.

Lance Whitney Contributing Writer
Lance Whitney is a freelance technology writer and trainer and a former IT professional. He's written for Time, CNET, PCMag, and several other publications. He's the author of two tech books--one on Windows and another on LinkedIn.
Lance Whitney
2 min read

Apple plans to file an appeal. CNET

Apple has been ordered to pay $533 million in damages after losing a patent lawsuit case tied to iTunes.

A federal jury in Texas found Tuesday that Apple infringed on three patents held by patent licenser Smartflash, Bloomberg reported. The patents in question concern digital rights management and other inventions related to data storage and payment systems for mobile devices. Smartflash had accused Apple of intentionally using its patented inventions in the iTunes Store and App Store.

Smartflash makes no products of its own but acts as a patent holder and licenser. Such firms are often labeled patent trolls for their propensity to file lawsuits against major companies that they accuse of patent infringement.

Apple said it will appeal the U.S. District Court's verdict, Bloomberg reported.

Smartflash lead counsel Brad Caldwell called the verdict "well-deserved and long-overdue recognition," according to statement that Smartflash sent to CNET on Wednesday. "Ultimately, the jury saw through Apple's arguments and reached the right result," he said.

The company charged Apple with intentionally violating the patents, arguing that a current Apple executive had seen a demo of the technology more than 10 years ago, Bloomberg reported.

Apple could have been on the hook for even more money. Smartflash had sought $852 million in damages, while Apple argued that damages should be no higher than $4.5 million.

Apple described Smartflash as "exploiting" the system in a statement sent to CNET:

"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. We refused to pay off this company for the ideas our employees spent years innovating and unfortunately we have been left with no choice but to take this fight up through the court system."

With the Apple trial over, next on Smartflash's patent-infringement lawsuit list is Samsung. Smartflash has also sued Google and Amazon over similar patent violation claims.

Updated at 7:05 a.m. and 7:20 a.m. PT with statements from Smartflash and Apple.