Apple Hit With $22 Million Verdict in Latest 'Patent Troll' Case

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Pedestrians walk by the new flagship Apple Store on May 19, 2016 in San Francisco. 

Jurors in the U.S. District Court for the Eastern District of Texas have again sided with a so-called "patent troll" in a case against a major tech company. On Sept. 15, a jury in Tyler, TX concluded that Apple had willfully infringed on a patent owned by Cellular Communications Equipment, a subsidiary of Acacia Research Corporation, and returned a damages award of $22.1 million.

The patent (US 8055820) pertains to a method for "providing a buffer status report using user equipment to calculate available space of a protocol data unit in a mobile communication network." According to Ars Technica, the system helps mobile providers optimize data usage. Acacia purchased the patent from Nokia in 2013.

"The jury found Apple's actions in this case constituted a willful misappropriation of CCE's intellectual property rights," said Ed Nelson, co-lead counsel for CCE. Apple declined to comment on the verdict or whether it planned to appeal.

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The dispute originated in 2014 when CCE sued Apple and the four major mobile carriers (T-Mobile, Verizon, AT&T, Sprint) for infringing on the patent, invented by Nokia’s longtime LTE chief architect Benoist Sebire. In August, a judge ordered the carriers to be dropped from the case because "CCE cannot receive a double recovery for the same sales."

Founded in 1993 and based in Newport Beach, Calif., Acacia calls itself the "industry leader in patent licensing." The company acts as an intermediary and partners with inventors and patent owners (like corporations) to "unlock the financial value" in their patents. It is publicly traded on NASDAX (ACTG).

Earlier this year, a jury in Tyler ordered Apple to pay $625.6 million for violating several patents held by VirnetX, another company known for collecting patents and then suing companies for allegedly violating them. In that case, Apple vowed to appeal, adding that "cases like this simply reinforce the desperate need for patent reform."

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Proponents of patent reform refer to companies like Acacia and VirnetX as "patent trolls" because instead of selling or developing actual products, they generate revenue by licensing and litigating over patents. Acacia is known for the practice buying patents from large companies instead of directly from inventors. With a recent track record of producing sympathetic juries, the Eastern District of Texas is the court of choice for such cases.


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