Apple (Photo : Reuters)
Apple and SmartFlash's legal battle over iTunes is back to square one. On Tuesday, U.S. District Judge Rodney Gilstrap thumbed down the $532.9 million damaged levied on the Cupertino-based firm by the jury.
Gilstrap issued the landmark ruling which provides Apple some relief because of the possibility that the very high computation was based on his instructions to the jury how to assess damages. The judge admits he may have possibly "skewed" the jury, reports CNET.
He briefed the jury on the "entire market value rule" on the request of Apple. Evidence presented at the trials indicate that the damage SmartFlash sought excluded the rule, which sets the product's market value as basis in calculating royalty and damages.
Gilstrap pointed out that SmartFlash's royalty base was only 23 percent of the total revenue generated by sales of the iTunes software, not 100 percent. A consumer survey found that the motivation of buyers in purchasing the disputed product was its features that Apple allegedly infringed.
The Texas jury favored SmartFlash in their February decision and determined that Apple should pay the former $543.9 million. It was smaller than the $852 million that SmartFlash sought and significantly bigger than the $4.5 million that Apple was willing pay.
The new trial would be to assess only the damages that Apple must pay to the 2013 patent-infringement lawsuit that SmartFlash filed against the tech giant that its iTunes software breached patents already held by SmartFlash. The smaller company had filed similar lawsuits against other tech giants, namely: Samsung, Google and Amazon.
While SmartFlash is not a manufacturer, it holds a number of patents that it licenses to producers of gadgets. Firms like SmartFlash are observed to often seek license for their patented technology. If unhappy with results given by regulators, it sues other tech companies for so-called infringement of its patent.
In turn, Apple accused SmartFlash in February of exploiting the marketplace. The tech giant said in a statement, "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."
SmartFlash has filed also another lawsuit against Apple for the same patents, but limited it to relatively newer devices that were not yet around when the initial lawsuit was filed. The firm, based in Tyler, claimed in the two lawsuits that SmartFlash founder Patrick Racz, who co-invented the patent being disputed in court, met with several people at a tech firm then called Gemplus. Racz discussed the technology with Gemplus staff, including Augustin Farrugia who later moved to Apple, reports PCWorld.
