News / July 1, 2021

Apple Infringed 2012 Patent, Owes $308 Million In Damages

Now that the court has ruled against Apple, the technology giant must pay out $308 million for infringement from a 2012 patent.

/ Written by sspringer

Jury Says Apple Infringed 2012 Patent, Owes $308 Million In Damages – And What This Means For You

  • A federal court jury on Friday, March 19, 2021, found that Apple infringed a digital media patent owned by Texas company Personalized Media Communications and must pay $308 million in damages. The case is Personalized Media Communications, LLC Apple, Inc., Civil Action No 2:15-CV-1366-JRG (Eastern District of Texas).
  • The ruling shows that even the most powerful industry leaders must respect others’ patents. It also shows that a well-drafted patent can reach technology decades into the future, technology that was unimaginable at the time the patent application was filed.
  • Inventors take heart: PMC founder John C. Harvey dreamed up and patented digital technology now being licensed to leaders in the tech, electronics and broadcast industries, including Zynga, Sony, Samsung, Cisco, Fox and DirectTV. Harvey is a member of the National Inventors Hall of Fame.
  • In this post, I’ll explain the ruling, how it may affect your company, and key takeaways.

The Ruling

In 2015, PMC accused Apple of infringing its patent U.S. 8,191,091, a 200-page patent issued to John C. Harvey and co-inventor James W. Cuddihy, in 2012 but claiming priority back to 1981. Read the patent here: https://patentimages.storage.googleapis.com/c2/6c/5a/9d27202064816a/US8191091.pdf

The patent covers a method of preventing piracy of information (i.e. digital content) transmitted to verified subscribers.  The invention was originally directed at preventing piracy of TV content delivered to subscribers by satellite or cable. PMC alleged that Apple’s FairPlay digital rights management technology, which controls user access to software and content on their Apple® device, infringes the ‘091 patent. The jury agreed. It awarded $308,488,108 in damages against Apple, as a running royalty. Apple plans to appeal.

The verdict comes after a 5 day trial, exactly a week after Judge Rodney Gilstrap rejected Apple’s argument challenging PMC’s patent as an “abstract idea” and therefore ineligible for patenting.

The PMC patent has 31 claims including 4 independent claims, providing four strategic claim sets that give it flexibility in enforcement against a variety of targets. And although the inventor originally had in mind TV broadcast technology (it was 1981, after all), the claim language is carefully and strategically generalized so it could be applied to future technology that had not yet been invented.

Is PMC the Good Guy or the Bad Guy?

PMC is a “non-practicing entity” or NPE, meaning it does not make or sell products itself. Its revenue comes from licensing its patent portfolio.  NPEs are also called patent trolls, because they buy patents from others for the purpose of obtaining patent licenses through litigation. While many call PMC a “patent troll,” the company says its portfolio of patents (currently 98) are created internally, not acquired from others. PMC founder and CEO John C. Harvey, a New Jersey native and retired Navy officer, has been a prolific inventor who began filing patent applications on fundamental digital technology in 1981, when his inventions were seen by many as something in the realm of science fiction.  Because they invested in well-drafted and strategic patents, the portfolio still has relevance to today’s technology.

For information on patent troll defense, we will be covering that topic in a post coming up.

What This Means For You

The case is a good reminder of the value of strategic patent drafting and prosecution. It is always tempting to keep the patent application and claims focused on the product in mind – it’s easier, faster and costs less to limit disclosure and potential coverage. In particular, the case illustrates how significant it can be to provide sufficient breadth and detail of disclosure in your first filing, whether it is a provisional or nonprovisional patent application. If John C. Harvey’s 1981 filing had been a “quick and dirty” provisional patent application disclosing only the bare minimum of what he had in mind, that priority would have become largely irrelevant by 2012.

Another key takeaway: The importance of keeping the patent family alive. PMC’s ‘091 patent lists 7 prior patent applications (now patents), which is how this 2012 patent potentially could claim priority back to 1981. A continuation or continuation-in-part application can be filed any time before a patent issues, and the “child” application can claim priority back to the parent’s priority.

Because priority can be the difference between getting your patent claims granted and being blocked by prior art (including your own prior art), filing a child application before your patent issues is critical to keep the patent family alive. This way you can get “another bite at the apple,” a chance to patent new claim sets that perhaps are better tailored to technological or business developments in your industry.

In Closing

Are you getting ready to file a patent application on a key innovation? Consider the value of investing in a strategic patent application family that can provide a foundation for decades of future value. Do you have a patent application pending or getting close to issuing? Ask your patent attorney about keeping the family alive. If your company already invests in R&D, consider patenting your innovations to build value in your company. And check back to this page for updates on this case.

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