A federal jury has awarded Optis Wireless Technology LLC and several related companies $300 million in damages after a second patent trial against Apple.
A jury previously found that Apple infringed five Optis wireless “standard essential patents” (SEPs) and awarded the company $506 million in damages. However, the judge vacated the award and ordered a new trial on the issue of damages.
The original patent trial was held in August 2020 – one of few held during the height of the pandemic.
As Bloomberg reported, Optis “claimed that Apple’s smartphones, watches, and tablets that operate over the LTE cellular standard were using its patented technology.”
As IP Europe explains,
A Standard Essential Patent is the name given to a patent which protects technology that has been selected for use in a standard. Patented inventions that must necessarily be used when implementing a cellular communication standard are “essential” to that standard and should be made available for use under a patent licence on a Fair, Reasonable and Non-Discriminatory (FRAND) basis by their owners.
As Bloomberg noted,
Apple argued that the entire trial in the Optis case was tainted because the jury wasn’t told of the patent owner’s licensing obligations. The issue wasn’t brought before the jury because Optis asked that the judge, not the jury, to determine whether it was compliant with its FRAND requirements.
In granting Apple’s request for a new trial, the court noted,
Optis sought to separate the issue of its own FRAND compliance from the alleged misdeeds by Apple which Optis alleged caused Apple to forfeit its right to raise a FRAND defense. … Under the guise of evidence relevant to willful infringement, Optis argued that evidence of Apple’s bad faith and holdout during pre-suit negotiations should still be presented to the jury. … Specifically, despite the existence of a non-disclosure agreement covering licensing negotiations between the parties, Optis sought to introduce evidence from internal Apple documents showing that Apple’s representations during negotiations were inconsistent with Apple’s own licensing practices. … The Court rejected Optis’s attempt to have it both ways—i.e., to use FRAND as both a sword (in the jury trial against Apple) and a shield (in a subsequent bench trial as to Optis’s own). However, doing so necessarily meant that the jury was not presented with evidence regarding Optis’s FRAND commitment or whether the requested reasonable royalty was FRAND-compliant.
In the second trial, the jury was able to hear evidence about FRAND licensing terms and reduced the damages on that basis.
Optis is what’s known as a “non-practicing entity,” or what’s sometimes called a “patent troll.” That means that it owns patent rights but doesn’t manufacture anything. Optis acquired its patents from companies like Panasonic, Samsung, and LG.
Apple said in a statement,
Optis makes no products and its sole business is to sue companies using patents they accumulate. We will continue to defend against their attempts to extract unreasonable payments for patents they acquire.
Apple also announced that it planned to appeal.
According to Apple Insider,
PanOptis is engaged in an international scrum to extract as much as $7 billion out of Apple's coffers for infringing on owned SEPs. A sister case in the UK could result in a global royalty rate for the patents, prompting Apple to threaten an exit from the British market if forced to pay a "commercially unacceptable" fee…