Monday, 19 October 2015

Apple facing damages bill for patent infringement

Apple Inc could be facing up to $US862 million in damages after a US Federal jury ruled on 13 October 2015 that it infringed a patent owned by the licensing arm of the University of Wisconsin.

The case

The Wisconsin Alumni Research Foundation (WARF) sued Apple in January 2014 alleging infringement of its patent rights in technology known as “Table Based Data Speculation Circuit for Parallel Processing Computer” which improves processor efficiency and performance. WARF believes Apple incorporated the technology into processors (A7, A8 and A8Cx) found in iPhone 5s, 6, 6 Plus, as well as several versions of the iPad without permission. 

According to court papers, Cupertino, California-based Apple denied the infringement arguing that the patent is invalid.

The jury in Madison Wisconsin found that the patent, filed in 1998, was valid and that it was used by Apple without the necessary permission.

What’s next?

The jury must now decide on damages, which the US District Judge who is presiding over the case predicts could amount to up to $US862.4 million (around $AUD1,100 million).

The jury will then determine whether Apple infringed the patent wilfully, which could lead to enhanced penalties. This is a contentious issue following WARF’s allegations that Apple ignored their offers to license the patent for a fee.

To add to Apple’s concerns, WARF launched another lawsuit against Apple last month which targets the chips used in the Apple’s newest models, the iPhone 6S, 6S Plus and the iPad Pro.

While this is unlikely to make a significant financial impact on Apple, who reported a quarterly net profit of $US10,700 million in July, this is a salutary reminder to look before you leap. By getting freedom to operate searches done in the key countries in which you are going to launch a product or service, will minimise your exposure to potential IP infringement actions once the product or service is launched.

Alex Hutchens
Paul McLachlan
John Kettle
Eliza Humble

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