Apple Officially Beats $308.5 Million Patent-Infringement Verdict

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Photo Credit: Laurenz Heymann

In March, Apple was fined a staggering $308.5 million for allegedly infringing upon a Texas-based company’s patent with its FairPlay digital rights management (DRM) technology. Now, however, a judge has officially tossed the multimillion-dollar verdict.

Judge Rodney Gilstrap, who Law 360 has identified as “the country’s single busiest patent judge,” just recently overturned the more than $300 million fine that a jury ordered Apple to pay about five months ago. The underlying courtroom confrontation initiated back in 2015, when Sugar Land, Texas’s Personalized Media Communications (PMC) accused the Cupertino-headquartered company of infringing upon multiple patents with the aforementioned FairPlay in the iTunes Store.

For reference, PMC “has been issued 101 patents as of April 22, 2020 from the 1981 and 1987 specifications,” according to legal documents, with this original pair of 1980s patents forming “the universe of PMC’s patent disclosures.”

Apple took aim at said patents’ validity before the USPTO’s Patent Trial and Appeal Board – which ultimately decided in the iPhone designer’s favor – and it appeared for a time that the legal battle would conclude. But an appellate court in 2020 overturned part of the decision, setting the stage for a five-day trial. Jurors then deliberated for just four or so hours, legal documents show, before determining that Apple should be made to pay nearly one-third of a billion dollars for the alleged patent infringement.

Apple higher-ups promptly criticized the verdict in a widely circulated statement – “Cases like this, brought by companies that don’t make or sell any products, stifle innovation and ultimately harm consumers” – and signaled their intent to appeal. And as initially mentioned, Judge Gilstrap, following a June 22nd bench trial, has now tossed the ruling as well as the associated penalty.

In brief, the judge explained his decision by noting that one of the plaintiff’s key figures had previously stated while under oath “that PMC’s strategy was to pursue one patent application at a time and wait until it issued before pursuing the others,” partially “so that the seventeen-year patent term would start as late as possible.

“PMC internal documents corroborate this strategy and its purpose,” the judge continued, with Apple having been “specifically identified” in a September of 1991 internal document “as one of several ‘companies that are natural candidates for participating in the commercialization of PMMC’s technologies.’

“PMC’s stated plan in the early 1990s was to prosecute applications serially and obtain patent protection far in excess of the statutory term,” Judge Gilstrap proceeded. “Apple has presented clear and convincing evidence of an unreasonable and unexplained delay, similar in length to delays previously held to constitute laches.”

PMC’s patent no. 8,191,091 is “unenforceable for reason of prosecution laches,” the judge reiterated in his final judgement. According to the USPTO, “while there are no firm guidelines for determining when laches is triggered, it applies only in egregious cases of unreasonable and unexplained delay in prosecution.”

Consequently, Judge Gilstrap wrote in his judgement that PMC “shall take nothing,” and that Apple “is the prevailing party in this case and shall recover its costs from PMC.” Additionally, the judge denied “all other relief requested by either party and now pending” and ordered the clerk to close the case.

Last month, Apple quickly settled a copyright infringement lawsuit over the use of a song in its Amazing Stories anthology series, and the German government’s Federal Cartel Office in late June launched an antitrust probe into Apple’s App Store.