BREAKING: Jury Clears Apple In $94M Suit Over iPhone, iPad Patents
Share us on: By Beth Winegarner
Law360, San Francisco (October 22, 2014, 3:51 PM ET) -- Apple Inc. triumphed in GPNE Corp.'s $94 million patent trial Wednesday when a California federal jury unanimously found that the tech titan's iPhones and iPads didn't infringe two data-communications patents, though Apple failed to convince jurors that those patents are invalid.
The jury of seven women and one man reached its verdict in the two-week trial after less than a day of deliberations, and with only one question. Late Tuesday, just as deliberations began, they asked whether a decision on a patent's validity or invalidity would “apply only to Apple, or to the patent in general.”
Apple championed the verdict in a statement from spokeswoman Rachel Wolf slamming GPNE as a “patent troll.”
"We are pleased the jury in California saw through GPNE's attempt to extort money from Apple for 20 year old pager patents that have expired, wasting time for everyone involved,” Wolf said. “GPNE is a patent troll with no active business other than patent litigation. They have sent more than 300 demand letters in the past year to everyone from truckers and farmers to roofers and dairies threatening costly legal entanglements if these small businesses didn’t pay them off -- this isn’t right.”
Attorneys for GPNE didn't respond to requests for comment on the verdict.
In opening statements earlier this month, GPNE attorney Kalpana Srinivasan of Susman Godfrey LLP said Apple’s mobile devices infringe inventions that date back to 1993 but were updated in GPNE's U.S. Patent Nos. 7,570,954 and 7,792,492, which were assigned in 2010 and 2009, respectively. Both describe how a mobile device can “reserve” space to send out a message on a cellular network.
“These are very valuable patents that enable people who use iPhones and iPads to communicate and transmit lots of data,” Srinivasan said. “But Apple isn’t paying for it … Apple’s use of GPNE’s property without permission is why we’re here.”
Honolulu, Hawaii-based GPNE was born out of two other companies, first Pioneer Tech Development Ltd. and later Digicomm Ltd. GPNE chairman Gabriel Wong invented the technology described in the patents in the early 1990s while trying to come up with a reliable way to communicate between mobile devices in Hawaii, where cell reception was poor and mountains often got in the way, Srinivasan told the jury.
The invention allowed devices to maximize their use of the airwaves while seamlessly transmitting data, which could minimize both the need for more infrastructure and the costs associated with that infrastructure, she said. But recently, GPNE discovered that a number of mobile companies were using its technology; some of those, including Nokia Corp., Samsung Electronics Co. and Motorola Mobility Inc., have licensed GPNE’s patents, she said.
GPNE's damages expert, Michael Dansky, studied GPNE's licensing agreements with other mobile-phone makers, including Samsung Electronics Co. and HTC Corp., and learned those companies had paid royalties of roughly $1 per phone to license the company's patents. Apple sold nearly 94 million allegedly infringing iPhones and iPads, leading Dansky to conclude that it should pay $94 million in damages.
Apple’s attorney, Ruffin Cordell of Fish & Richardson PC, argued that its iPhones and iPads don’t infringe GPNE’s patents because the inventions only cover mobile communications from pagers, which are named specifically in both patents. Two-way paging systems function differently from cellphone systems, providing more powerful signals that can reach places mobile phones can’t, such as basements and elevators, Cordell argued.
“We need your help to decide these big issues, and to force GPNE to be true to its patents and true to what it really patented,” Cordell told the jury. “Just because you have a patent doesn’t mean you can go out and sue.”
After being stymied by U.S. District Judge Lucy Koh, who told Apple in June that it wasn’t allowed to call GPNE a “patent troll” at trial, Cordell found other ways to describe the company to the jury Monday afternoon.
“It’s a company that doesn’t make anything. It’s a company that doesn’t sell anything,” Cordell said, noting that GPNE sent roughly 300 letters to a variety of companies, threatening to sue for patent infringement if the targets didn’t license GPNE’s patents. “That’s legal. What are they interested in? Are they just trying to get money?”
The 2011 suit was the last of nine patent-infringement actions that GPNE filed against Apple, Amazon.com Inc., Barnes & Noble Inc. and other e-reader and cellphone makers. The other eight defendants from the severed cases settled, according to a GPNE attorney.
The case is GPNE Corp. v. Apple Inc., case number 5:12-cv-02885, in the U.S. District Court for the Northern District of California, San Jose Division.
