Apple Fined $308.5 Million for Infringing Fairplay DRM Technology

Apple Music Indie Royalty Fund
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Apple Music Indie Royalty Fund
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Photo Credit: Zhang Kaiyv

A federal jury has found that Apple infringed upon a Texas-based company’s patent with its FairPlay digital rights management (DRM) technology, and as a result, the Cupertino-headquartered iPhone designer has been ordered to pay $308.5 million.

The underlying courtroom confrontation kicked off back in 2015, when Sugar Land, Texas’s Personalized Media Communications (PMC) sued Apple for allegedly infringing upon seven of its DRM patents with the iTunes Store. Apple successfully targeted the validity of the underlying patents before the USPTO’s Patent Trial and Appeal Board, but an appellate court last year overturned the latter ruling, thereby allowing the case to proceed.

Following a five-day trial, jurors found Apple liable for the alleged infringement and directed the publicly traded company to pay a running royalty of $308.5 million to Personalized Media Communications, which notes on its website that it “owns a fundamental patent portfolio relating to the control of networked equipment.” The jury began deliberating at about 11:30 AM and reached a verdict at 3:48 PM, legal documents reveal.

Additionally, PMC notes that its “licensing strategy focuses on mutually beneficial business outcomes” – while acknowledging licensees such as Samsung and noting the recent or ongoing litigation that it’s pursued against Google, Netflix, and others.

Apple – which is reportedly developing new HomePod devices that will feature a screen and multiple cameras – addressed the jury’s decision in a widely circulated statement, taking aim specifically at the nature of PMC’s operations.

“Cases like this, brought by companies that don’t make or sell any products, stifle innovation and ultimately harm consumers,” said Apple, which indicated separately that it intends to appeal the ruling. And as an aside, local reports revealed last Friday that Sao Paulo, Brazil-based consumer-protection agency Procon had fined the 45-year-old company over $1.91 million for reportedly failing to include chargers with new iPhones.

In other patent-litigation news, short-form video-sharing app TikTok is facing multiple patent-infringement lawsuits – one of which was levied by competing app Triller, now the owner of Verzuz. The controversial TikTok pushed back against the allegation and the complaint, however, prompting a public rebuke from Triller head Mike Lu.

Plus, Spotify and Dublin-based non-practicing entity Data Scape settled their long-running patent battle in late June of 2020, though the terms of the compromise haven’t been made publicly available.

Lastly, Spotify has quietly secured patents for a variety of technologies in recent months, including an AI-driven “spoken words analyzer,” a system designed to target listeners based upon “nostalgia metrics,” and even a means of recommending music to users after analyzing their voices.

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