A Texas federal court vacated a $533 million verdict against Apple in favor of Smartflash because of an improper jury instruction related to damages. 

The decision comes out only days after Judge Rodney Gilstrap of the Eastern District of Texas set aside the jury’s determination of willful infringement, for which Smartflash argued that damages amounted to a trebled $1.6 billion. In his July 2 order, the court stated that “no reasonable jury could have concluded that Apple’s infringement was willful.”  

On July 7, the court agreed with Apple’s argument that a new trial on damages was warranted in light of an instruction the court provided to the jury. Judge Gilstrap stated that “the confusion created by the instruction . . . warrants a new trial on damages in this case.” The court explained that in view of “clarity of post-trial hindsight,” the court’s instruction created a skewed damages model for the jury. The court did note, however, that although the instruction was not an incorrect statement of law, it was inapplicable to the facts of the case.

The court also noted that it had separate concerns about Smartflash’s damages model, which was “inextricably intertwined with issues of liability and infringement.” The court stated that in the new trial, it anticipated Smartflash would present a different damages model to the jury. Accordingly, the court vacated the $533 million damages finding by the jury, and ordered a new trial.

Smartflash LLC v. Apple Inc., No. 6:13-cv-447-JRG (E.D. Tex. July 7, 2015) (Gilstrap, J.).