Apple Must Pay Over $506 Million in 4G LTE Patent Dispute

The sun reflects on Apple’s Fifth Avenue store in New York in June 2020. (AP Photo/Mark Lennihan, File)

MARSHALL, Texas (CN) — A federal jury in East Texas Tuesday ordered Apple to pay over $506 million for infringing on 4G LTE patents controlled by intellectual property owner PanOptis in the country’s first patent jury trial since the Covid-19 shutdown in March.

The jury concluded five of Plano-based PanOptis’ patents were infringed by Apple’s wireless products and ordered $506.2 million in damages as a royalty for past sales. U.S. District Judge Rodney Gilstrap held the trial in person with social distancing and face mask use being enforced in the courtroom. He now has the option to increase damages by up to triple since the jury concluded the infringement was willful.

PanOptis sued in February 2019, claiming Apple refused to pay licensing fees for the use of the technology in its iPhone, iPad and Apple Watch products. Apple argued at trial that the patents were invalid but the jury concluded the company failed to prove “by clear and convincing evidence” that any of PanOptis’ claims were invalid.

Attorneys for Apple and PanOptis did not immediately respond to requests for comment Tuesday evening. Apple is expected to appeal. 

The company said in a statement that PanOptis accumulates patents “simply to harass the industry” and “only serve to stifle innovation and harm consumers.”

The verdict comes one year after Apple closed its two stores in Plano and Frisco within the Eastern District of Texas. Media reports suggested the closures were aimed at halting new “patent troll” lawsuits in a jurisdiction famed for how friendly it is to patent plaintiffs. Apple opened a new store several miles south at the Galleria Dallas mall that is under the jurisdiction of the Northern District of Texas.

Tuesday’s verdict comes more than seven years after Apple was ordered in the Eastern District to pay over $368 million for its FaceTime feature infringing on two patents owned by VirnetX. In a third case in 2018, a federal jury in the Eastern District awarded VirnetX over $503 million from Apple for infringing on four additional patents. The judge in the case later tossed the award, concluding two of the patents relate to FaceTime, not Apple’s VPN On Demand feature at the center of the lawsuit. The Fifth Circuit later ordered a new trial on damages that was to begin next week, but the trial judge on Monday postponed the proceedings until October due to the still-raging pandemic.

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