A federal jury in Texas found that Apple’s iTunes infringed three patents held by Smartflash LLC and awarded Smartflash over half a billion dollars in damages. However, the damages were less than the $852 million Smartflash had asked for.

Smartflash, a non-practicing entity, sued Apple in 2013 for its alleged infringement of patents for storing and accessing downloaded media in a way that protected copyrighted material, such as songs and games, from piracy while still allowing convenient access for legitimate users.

The plaintiff also brought similar lawsuits against Samsung, Google, Amazon, and HTC.


Smartflash asserted that one of the co-inventors of the patents at issue met with people at Gemplus (now Gemalto), a European SIM card maker, to discuss the technology and that Augustin Farrugia, now a senior director at Apple, was one of the people who met with the inventor at Gemplus in the year 2000.

The jury found that Apple’s patent infringement was willful and that Apple had failed to prove that the patents were invalid.

Apple had contended that the patents were invalid under the US Supreme Court’s recent ruling in the Alice case, in which the high court found a computer-implemented invention to be too abstract to be patentable.

After the verdict was announced, Apple said that it would appeal and released a statement saying:

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.

Under US patent law, independent invention is not a defense to a patent infringement suit.

New Lawsuit

According to PCWorld, one day after its court victory Smartflash sued Apple again, this time focusing on newer Apple products, such as the iPhone 6, that came out after the previous case was filed, and alleging infringement of an additional four patents.