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Apple hit with massive half-billion dollar blow in patent trial

Published Feb 25th, 2015 7:45AM EST
Apple vs. Smartflash: $532.9M Verdict

Apple lost an iTunes-related patent case, Bloomberg reports, with a jury having decided to award Smartflash a massive $532.9 million in damages. Smartflash was looking for $852 million, whereas Apple said the three patents part of the trial were worth $4.5 million at most.

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Smartflash alleged that its inventions, related to digital rights management, to data storage and access through payment systems, were infringed by Apple’s iTunes. The company also asked for royalties on iPhone, iPad and Mac sales, or devices used to access iTunes content.

Apple, meanwhile, said that Smartflash doesn’t actually have a product, and it’s simply looking to score royalties from Apple tech.

“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,” Apple spokesperson Kristin Huguet said. “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.”

Smartflash doesn’t have any products, Bloomberg says, and its only business is licensing seven patents it got between 2008 and 2012. However, the company was offered at some point less than $200,000 for an interest in one of its patents, according to court documentation, and its founder once met with executives of Gemalto SA, including Augustin Farrugia, who is now a senior director at Apple.

In addition to Apple, the company has also sued Samsung and Google.

Chris Smith Senior Writer

Chris Smith has been covering consumer electronics ever since the iPhone revolutionized the industry in 2008. When he’s not writing about the most recent tech news for BGR, he brings his entertainment expertise to Marvel’s Cinematic Universe and other blockbuster franchises.

Outside of work, you’ll catch him streaming almost every new movie and TV show release as soon as it's available.