The news recently broke that Thomas Ross from Florida is requesting $10 Billion from Apple due to infringement on a patent application he made in 1992. Ross would also like a 1.5% royalty on all future sales of iOS devices.
The basis of the lawsuit is based on drawings Ross made in 1992 for an “electronic reading device” or ERD.
So what do you think? Does it resemble an iPhone in any way? Does it possibly resemble any early eBook readers or smartphones?
There are several problems with Ross’ claim though. There are the basic drawings that don’t appear Apple device like. And there is the elephant in the room – his patent application was actually abandoned after he failed to pay the patent registration fees.
The lawsuit claims Ross was “the first to file a device so designed and aggregated as to have created a novel combination of media and communication tools… whose identity was, since then, hijacked and exploited by Apple’s iPhones, iPods, iPads and others”.
The lawsuit further claims that Apple’s devices “are substantially the same as his technical drawings of the ERD, and that Apple’s three-dimensional derivative devices (iPhone, iPod, iPad), embody the non-functional aesthetic look and feel”.
This isn’t the first time Apple has been attacked by patent trolls. Judging by the results, it most likely will not be the last time either.
In June the Beijing Intellectual Property Office heard a case originally filed in 2014. Baili Marketing Services Inc. of Shenzhen China claimed that Apple had copied its design of their 100C smartphone for the iPhone 6/6 Plus.
The Beijing Intellectual Property Office sided with Baili and issued an injunction. Apple was ordered to remove iPhone 6 and 6 Plus phones from the shelves. Apple of course appealed the ruling and the product is still on the shelves in Beijing stores, for now.
Apple is anxious to continue penetration of the Chinese market and this is a definite setback that Apple may have to settle.
It also appears that this is just another case of a patent trolling group. The Wall Street Journal investigated and discovered that Baili Marketing is a company that “barely exists” and is owned by Digione. Digione products have been off the market for over a year because their devices are considered “buggy”.
Unfortunately for Apple, this does not matter as the issue is patent infringement, not device quality. This move could be big for Digione however.
Apple is also facing legal woes over FaceTime. Several companies have sued Apple over its voice-over-IP (VoIP) technology due to patent infringements. Straight Path Group claims Apple has violated five different patents dating back to 9/25/1995.
These patents were owned and used in the WebPhone product by NetSpeak. The patents were examined again and validated by PTAB (Patent Trial and Appeals Board). Straight Path patent details using a database and device IP addresses to determine if a device is available or offline. Their claim is that Apple is tracking user IP addresses through Push Network and SIP (Session Initiation Protocol, a VoIP protocol). It also claims that Apple has infringed on technology the WebPhone used to use.
Since WebPhone has not been around for over a decade, this also seems to be a case of patent trolling.
Apple has also been sued by others over FaceTime, including VoIP-Pal and VirtnetX. These companies can also be considered “trolls” since they own patents but show little desire to commercially develop them or create products. In 2012 they were awarded $368 million and a 1% running royalty off all iPhone and iPad revenues. Apple requested a retrial and VirtnetX demanded Apple shut down FaceTime.
In the retrial which ended in February 2016, the $368 million verdict and 1% royalty were overturned; however, the East Texas jury awarded VirnetX a whopping $625.6 million (but no running royalty).
Expect Apple to appeal again, but VirnetX may seek to add a “running royalty” on their products.
Apple’s success will make it a perpetual target for those who seek to gain off their fortune. Though Apple may win most contests, in many more it may have to settle just to keep their products on shelves. There will also be some losses. Due to their size and success, when they lose, they will lose big.
So what are your thoughts? Are patent trolls stifling innovation and progress?
Author: Jeff Williams
Jeff Williams is an experienced mechanical engineer and lawyer that consults closely with clients in a strait forward and clear manner. He brings a particular set of strengths and unique perspectives to the firm.
Jeff received a B.S. in Mechanical Engineering from Arizona State University in 2005. He was an engineer for a number of years at a number of large corporations before pursuing his law degree. He graduated from Texas A&M University School of Law (formerly Texas Wesleyan University School of Law) with a J.D. in 2010. By combining his education and prior work experience into the field of intellectual property law, Jeff has developed key skills to fully assist clients.