Apple Won’t Have to Pay|Out Again in Patent Suit

LUFKIN, Texas (CN) - A federal judge refused to let Personal Audio take a second bite at Apple for patent infringement, finding that a jury's lump-sum award applies to all Apple products, not just those presented at trial.

Personal Audio sued Apple, Sirius XM Radio, Coby Electronics and Archos in federal court for selling portable music players that infringe on two of its patents. The patents involve the technology to play a sequence of audio files and skip forward and backward through the sequence.

Finding that Apple did infringe on two patents, a jury ordered it to pay Personal Audio a lump-sum royalty of $8 million on July 8.

The patent owner, which had advocated for a per-unit running royalty, argued after the verdict that the lump sum did not provide Apple with a fully paid-up license for past and future sales of all products that use the patented technology.

U.S. District Judge Ron Clark rejected Personal Audio's motion for judgment as matter of law, and he refused to hold a second trial to address additional Apple products.

Clark explains in his 24-page order that "the court suggested to the parties that, given the complexity of the infringement and validity issues and the number of accused devices, it would be prudent to bifurcate certain issues or products and hold separate trials in order to make the case more understandable to the jury."

The court later decided to divide the Apple products into two groups and hold two trials, Clark noted. The iPod Classic, iPod Mini and iPod Nano products composed the first group, leaving the iPod Touch, iPhone and iPad products for the second group.

It was during the trial for the first group of products that the jury made its decision to award Personal Audio the lump sum of $8 million.

Personal Audio later contended that the lump sum did not apply to the Apple products slated for the second trial, but the judge shot down the patent owner's claim.

"After the jury returned its verdict, Personal Audio argued that a particular instruction indicated to the jury that it could only find damages for the infringement of the iPod products in suit and not any other Apple products," Clark wrote. "At trial, post-verdict, Personal Audio pointed to the following sentence from the jury instructions: 'You must disregard any testimony or evidence that Personal Audio is entitled to any damages based on technology incorporated in, or profits received from, iTunes or any other Apple product that is not include in the eight groups of accused products that I listed for you above.'"

"That particular instruction was not intended to address the effect of a lump sum royalty," Clark added. "Rather, it was included in response to the testimony of Personal Audio's damages expert, who had implied that the per unit running royalty rate he advocated included value added by Apple's iTunes software, which was not an accused product."

The judge also pointed out that Personal Audio was quiet about the wording of jury instructions before deliberations, and only cried foul after the verdict. In conclusion, he said the jury's $8 million verdict was fair.

"Personal Audio's choice to present only a running royalty theory, and to not even suggest by testimony, cross-examination, or attorney argument an alternative amount for a lump sum award in the event the jury found that to be the appropriate form of royalty, was a bold tactical move," Clark wrote. "But a patentee who puts on little or no evidence of an appropriate lump sum royalty is not in a good position to complain that the amount awarded by the jury is not reasonable."

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