If any company knows how to get rid of a billion-dollar patent-infringement verdict, it’s
Apple pledged to appeal Wednesday’s $1.1 billion
In the past decade, the iPhone maker has evaded a $533 million
“They are certainly one of the most targeted entities out there, so it makes sense for them to aggressively defend themselves when they don’t see a path to settlement,” said Jonathan Stroud, chief intellectual property counsel for Unified Patents LLC, which challenges patents used in litigation against its members, including Apple. “Otherwise they’ll be seen as an ATM and continue to be targeted regardless.”
Led by Chief Litigation Counsel
The cases don’t always end in complete victories. Apple continued to lose market share to Samsung, and its battle with Qualcomm ended in a settlement where it paid the chipmaker billions of dollars and agreed to start using its chips again.
“This is just the starting point,” said Bridget Smith, a lawyer with Lowenstein & Weatherwax in Los Angeles, of Wednesday’s verdict. “They’re still going to have to win on appeal.”
Apple also has been accused of being a bully when it comes to using other companies’ inventions. Medical device maker
The big-dollar verdicts against Apple are in part because of its size. The $838 million won by CalTech is less than two days’ worth of sales for Apple and is equal to less than 2% of the company’s $55.3 billion net income in fiscal 2019.
Broadcom’s share of the verdict could mean a bigger rap to its bottom line. The San Jose-based chipmaker reported $22.6 billion in sales in the fiscal year ended Nov. 3, and net income of $2.7 billion. Broadcom fell as much as 2.8% Thursday on the news.
CalTech said it was “committed to protecting its intellectual property in furtherance of its mission to expand human knowledge and benefit society through research integrated with education.”
District Court Judge George Wu, who presided over the trial, has ordered a telephone conference Feb. 6 to determine the next steps in the case. The verdict is the sixth-largest for a patent-infringement case in U.S. history, according to data compiled by Bloomberg. No $1 billion-plus patent verdict has ever stood -- they are tossed on appeal or settle for a lower amount.
“Less than a hundred million, there’s not a lot of attention,” said Bernard Chao, a professor at the
The biggest decision won by a university was a $1.17 billion verdict won by Carnegie Mellon University against
“When you have a number that big, the courts scrutinize the verdict and say ‘Is this legit?’” said
Apple and other Silicon Valley companies have been trying to lower how much patent owners can collect in damages for years. They have argued too often juries are awarding big awards when the invention is for a tiny component in a complex device.
The concern, said Timothy Holbrook, a professor at Emory Law in Atlanta, is “giving too much weight to the value of this technology as it relates to a broader product.”
Working to limit damages is at the heart of a Supreme Court petition Apple has filed seeking to overturn a $439 million judgment won by
“There is no doubt that they’ll spend a large amount of money to fight to the bitter end even long after it’s become crystal clear they should take responsibility via a license,” said Brad Caldwell of Caldwell Cassady Curry in Dallas, who has represented VirnetX for the past decade.
Even as tech companies want to avoid paying high royalties, universities are trying to collect more money from their research, with recent lawsuits filed by the University of California against
Universities are seen as the
“Everyone is so under pressure to come up with funds to be more competitive and put together better packages for incoming professors,” Corless said. The universities nonetheless have been asking themselves “If we start asserting some of our patents against blue chip corporate America is that appropriate for us and who we are?”
While many legal experts predict the damages award will be cut, if Apple doesn’t get an outright victory, Corless said CalTech won’t give up without a fight.
“It’s a big deal,” he said. “It would change an institution if they get the money.”
(Adds comment from VirnetX lawyer in 19th paragraph. An earlier version corrected the verdict amount in first deck headline.)
--With assistance from
Elizabeth Wasserman, Rebecca Baker
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