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Thursday, July 25, 2024 | Back issues
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Texas Jury Hits Apple|With $533M Verdict

(CN) - A federal jury Tuesday night found that Apple willfully infringed on three software patents of a Texas firm in developing iTunes, and ordered the tech giant to pay $532.9 million to the smaller firm.

The jury verdict was rendered late Tuesday night in the Tyler, Texas Federal Court after eight hours of deliberation.

Smartflash sued Apple in May, 2013, saying Apple's iTunes software infringed on its patents related to access to and storage of downloaded songs, games and other digital media.

On its website, Smartflash says the essence of its innovations lay in their "inventive digital memory system" which permits the secure and controlled receipt, storage, retrieval, use and transmission of digital data" and did so while also handling digital rights management and payment facilities.

In its complaint, Smartflash said in the early 2000s, its founder, Patrick Racz, had discussed the company's technology another firm, Gemplus (now Gemalto S.A.) and specifically with Gemplus's Augustin Farruji, who later became a senior director at Apple.

Apple tried to have the lawsuit thrown out, but in a ruling earlier this month, U.S. District Judge Rodney Gilstrap rejected the company's contention that Smartflash's technology was too basic to deserve patent protection and said the case should go on.

In a statement, Apple said it disagreed with the jury's decision.

"Smartflash makes no products, has no employees, creates no jobs, has no U.S. presence, and is exploiting our patent system to seek royalities for technology Apple invented," the company said. "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."

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