Apple Wins $ 308.5 Million Patent Ruling – Enterprise Insurance

(Reuters) – Apple Inc. persuaded a federal judge to dismiss a $ 308.5 million jury verdict it lost to a private licensing company for patent infringement related to digital rights management.

In a Thursday night ruling, U.S. District Judge Rodney Gilstrap said Personalized Media Communications LLC had deliberately delayed filing its application with the U.S. Patent and Trademark Office in hopes of receiving a larger payout.

"This court takes the prospect of disrupting the unanimous verdict of a properly composed jury very seriously," but PMC's "deliberate delay strategy" is a "deliberate and egregious abuse of the legal patent system," wrote Judge Gilstrap.

PMC, based in Sugar Land, Texas, alleged in its 2015 lawsuit that the FairPlay software used on Apple's iTunes service and App Store to decrypt movies, music and apps infringed its 2012 patent.

But the judge, who is based in Marshall, Texas, accepted Apple's defense of the "law enforcement loopholes" that can prevent a patentee from enforcing a patent after an unreasonable and inexplicable delay. Judge Gilstrap said PMC's delay had lasted for many years.

The jury held Apple, based in Cupertino, California, liable for PMC on March 19 after a week-long trial.

"PMC respectfully contradicts Judge Gilstrap's verdict and plans to appeal," Goodwin Procter's attorney Douglas Kline said in an email.

Apple did not immediately respond to requests for comment.

PMC's patent application dates to applications filed in the 1980s.

Judge Gilstrap said PMC used what is known as a "submarine" patent strategy, filing serial applications, and then "hiding" its patent portfolio until industry largely adopted the underlying technology.

He said PMC will not charge royalties or file a violation until it believes the violation is widespread.

He cited an internal PMC document from 1991 which identified Apple, AT&T, Hewlett-Packard, IBM, Intel and Microsoft as "natural candidates" for his strategy.

A June 1 ruling by the Federal Court of Appeals to handle patent cases made it easier to challenge submarine patents.

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