For this
blog post, please refer to the article listed below. It is an article in Fortune magazine
explaining how Apple’s bullish behavior lost the company over half a billion
dollars. The reason I have chosen this
case is that it shows how NPEs operate for the good of the patent industry and
how the big companies (Apple in this instance) fight to do whatever they want
simply because they are a juggernaut of the tech world.
Smartflash
LLC is a small technology developing and licensing company in Tyler, Texas,
started by a man who grew up on a farm with only an 8th grade
education. Patrick Racz, the founder of
Smartflash, LLC, and his background were of large attention to the legal team
of Apple in a recent patent infringement court case originally filed in 2013. The case Smartflash brought up against Apple
was infringement on three specific patents relating to data storage. The patents in question were all valid and
filed by Racz himself, a fact that he later pointed out as to not make
Smartflash come across as a patent troll, but merely a non-practicing
entity. This did not matter to Apple’s
legal team, as they sought out to fight the charges and pay a little as
possible in damages.
When the
court proceedings took place, Smartflash had all the proper questions ready to
address and focused on the specifics on the case. Apple, on the other hand, called several
witnesses to speak in their favor and to prove they did not willfully infringe
on any prior arts. When they called
Racz, they simply intended to show that with his educational background, he was
not qualified to hold such patents and targeted him as a troll fishing for
licensing fees. They attacked him with
ridiculous questions and according to Brad Caldwell, Smartflash’s legal
counsel, “They acted like we’re Apple and have no need to respect other
people’s intellectual property.”
But as we
all know, all intellectual property is to be respected or else to face the
consequences. In this case, Apple’s
consequences amounted up to over half a billion dollars in damages payable to
Racz and his company. This case showed NPEs
in a positive light, fighting for their IP rights against large companies that
simply aim to dominate the industry through means of their huge reputation and
market share.
In my next
post, I will outline an example in which an NPE are detrimental to the patent industry.
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