Personal Audio wins patent verdict against Apple

Apple saw a rare instance of a direct loss in a patent dispute Friday after Eastern Texas District Court Judge Clark issued a ruling that it should pay $8 million for allegedly violating patents. Personal Audio won the one-time payment of damages after the court determined that Apple's support for downloading playlists on the iPod and iPhone had violated two generic patents, one for an "audio program player including a dynamic program selection controller" and another for an "audio program distribution and playback system." The amount was ten times smaller than the about $84 million Personal Audio had demanded at the start.

The June 2009 lawsuit had originally included other portable audio device makers, including Archos, Coby, and Sirius XM. These three had settled between May and July of 2010 after deciding that they couldn't afford to challenge a final verdict.

Multiple factors had worked against Apple. It and the other three had failed in a motion to transfer the case to Massachusetts and away from East Texas, a court district notorious for ruling in favor of patent trolls. Apple individually may have blown its chance by thrusting 418 documents, or a total of 6,300 pages, of documents on the court just three weeks before a second trial setting. The iPod maker claimed it had only discovered the files on a disk when key device developer and witness Jeff Robbin moved offices. "Reasonable inquiry" would have found the documents much earlier, Judge Clark said in late June.

It's unclear if Apple will appeal the verdict, though the much lower payout may be a compromise reached by Personal Audio to reduce Apple's motivation to appeal the verdict and possibly overturn not just the case but determinations that the patents are valid, which could affect other lawsuits.

Personal Audio fits the classic definition of a patent troll. The company makes no meaningful products of its own and relies solely on royalties and threatened lawsuits for income. Such companies often either inherit patents from defunct companies or buys the patents from elsewhere in the hopes of turning a profit from the lawsuit. [via Florian Mueller]

by MacNN Staff