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 Though Smartflash had been asking for $852 million in damages,
Tuesday night's verdict was still a blow to Apple.
The jury, which deliberated for eight hours, determined Apple had
not only used Smartflash's patents without permission, but did so
willfully.
Apple, which said it would appeal, said the outcome was another
reason reform was needed in the patent system to curb litigation by
companies that don't make products themselves.
"We refused to pay off this company for the ideas our employees
spent years innovating and unfortunately we have been left with no
choice but to take this fight up through the court system," Apple
said in a statement.
Smartflash sued Apple in May 2013, alleging its iTunes software
infringed its patents related to accessing and storing downloaded
songs, videos and games.
"Smartflash is very happy with the jury's verdict, which recognizes
Apple's longstanding willful infringement," Brad Caldwell, a lawyer
for Smartflash, said in an email.
The trial was held in Tyler, which over the past decade has become a
focus for patent litigation.
Smartflash's registered office is also in Tyler.
It was also in Tyler federal court that a jury in 2012 ordered Apple
to pay $368 million to VirnetX Inc for patent infringement. A
federal appeals court later threw out that damages figure, saying it
was wrongly calculated.
Apple tried to avoid a trial by having the lawsuit thrown out. But
U.S. District Judge Rodney Gilstrap, who presided over the case,
ruled earlier this month that Smartflash's technology was not too
basic to deserve the patents.
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Apple had asked the jury to find Smartflash's patents invalid
because previously patented inventions covered the same technology.
Smartflash's suit said that around 2000, the co-inventor of its
patents, Patrick Racz, had met with executives of what is now
European SIM card maker Gemalto SA, including Augustin Farrugia, who
is now a senior director at Apple.
Smartflash has also filed patent infringement lawsuits against
Samsung Electronics Co Ltd, HTC Corp and Google Inc.
The case is Smartflash LLC, et al v. Apple, Inc, et al, in the U.S.
District Court for the Eastern District of Texas, No. 13-cv-447.
(Reporting by Andrew Chung in New York and Supriya Kurane in
Bengaluru; Editing by Stephen Coates and Ted Kerr)
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