Apple has been ordered to pay over $700 million to Texas-based “mobile expertise firm” Optis in what’s being known as a landmark UK patent ruling, stories ipfray.
The England and Wales Court docket of Attraction dominated at present that Apple should pay a lump sum of $502 million to Optis Mobile Expertise LLC as a result of its use of standard-essential 4G patents in iPhones and iPads over a 14-year interval, which stretched from 2013 to 2027.
Optis was initially awarded $56.43 million by the Excessive Court docket in a 2023 ruling, so at present’s quantity is kind of a leap from that. Apple should additionally pay curiosity, which might quantity to greater than $200 million, making Apple’s legal responsibility over $700 million.
Optis is a Texas-based firm that doesn’t manufacture merchandise however holds and licenses mental property. Such firms are formally known as “non-practicing entities,” however a extra applicable time period is “patent trolls.” Their sole enterprise mannequin is shopping for up portfolios of patents invented by others after which producing income by suing each firm they will discover that occurs to be utilizing them.
Filed in 2019, the UK case took some time to play out. Nonetheless, it finally determined that Apple had breached its obligations to license the patents on FRAND (honest, affordable, and non-discriminatory) phrases. Worldwide requirements for using important wi-fi expertise require as a lot.
For its half, Apple had argued that the royalty charges Optis had proposed had been extreme and didn’t adjust to FRAND rules.
The UK case was additional sophisticated by the UK’s broad jurisdictional claims. In a lot the identical means the UK has just lately felt it has the appropriate to demand Apple present secret entry to the information of each iCloud consumer on this planet, it additionally believes that English courts can set international FRAND licensing phrases. Whereas most patent lawsuits solely have an effect on royalties generated inside the jurisdiction of the court docket, the UK Supreme Court docket dominated in 2020 that UK courts can set the speed that an organization like Apple ought to pay for all of its patents worldwide — despite the fact that it’s nonetheless solely contemplating the infringement of patents within the UK.
This led to a 2021 standoff the place Apple threatened to drag out of the UK solely in response to a judgment that might have seen the tech big paying over £5 billion (~$7 billion USD) in court-mandated royalties for the alleged international infringement of Optis’ patents. That quantity would have probably exceeded Apple’s annual income from gross sales within the UK. Fortunately, the quantity turned out to be much less staggering, nevertheless it nonetheless represents what critics have known as an “extraterritorial overreach” by the UK courts.
Apple made a press release to Reuters, saying “We’re dissatisfied by this determination and plan to enchantment.”
Optis makes no merchandise and their sole enterprise is to sue firms utilizing patents they purchase. We’ll proceed to defend in opposition to their makes an attempt to extract unreasonable funds.
Whereas Apple can petition the UK Supreme Court docket to evaluation the case, such appeals are granted on a restricted foundation solely when vital factors of regulation or issues of public curiosity are concerned.
As you possibly can think about, Optis was fairly happy with the ruling, telling MacRumors:
We’re happy the UK Court docket of Appeals has acknowledged and corrected a clearly flawed prior ruling and has made significant progress towards affirming the true worth of our patents to Apple gadgets. Along with ordering fee that exceeds $700 million with curiosity and costs, the Court docket has judged that “Apple’s vital negotiating power leads some events to agree decrease charges than can be agreed between a keen licensor/keen licensee” thereby gaining an unfair benefit. We’ll proceed to make sure honest compensation for the Optis mental property that allows high-speed connectivity for hundreds of thousands of gadgets all over the world.”
This isn’t the primary time Apple has fought a shedding court docket battle with Optis or its sister firms.
In 2020, Apple was ordered by a Texas federal jury to pay PanOptis $506 million for infringing a handful of 4G LTE technology-related patents. Nonetheless, a Texas decide vacated that award in 2021, ordering a brand new trial to focus solely on damages. US District Choose Rodney Gilstrap stated the primary jury was not adequately geared up to find out if the award quantity met FRAND (a good, affordable, and non-discriminatory foundation) phrases.