Here's perfect proof of what a big money manufacturer does when they steal technology and then get caught by a small inventor. This is exactly what they all will do to get our new conservative Congress and the Pres to pass protectionist legislation to protect them from patent holders. Also, I'm including a little response to Mr. Apple from an attorney on another board.
g hors
East Texas Jury Hits Apple with $533 Million Patent Verdict
Scott Flaherty, The Litigation Daily
February 25, 2015
Apple Inc. and its lawyers at Ropes & Gray lost the year's first mega patent infringement verdict this week, when a jury in Tyler, Texas awarded $532.9 million to patent licensing company Smartflash LLC after finding Apple willfully infringed three data storage patents.
After a six-day trial before U.S. District Judge Rodney Gilstrap, the jury concluded that Apple infringed four claims across three patents held by Smartflash, a patent-licensing company registered in Tyler.
The result marks a win for Dallas-based Caldwell Cassady & Curry, which was founded by a trio of former McKool Smith lawyers in 2013 after they helped patent plaintiff VirnetX Inc. secure a $368 million infringement verdict against Apple. The firm suffered a big blow in the VirnetX case last year when an appeals court overturned the 2012 verdict.
Although Smartflash's lawyers had sought $852 million from Apple, lead counsel Bradley Caldwell said Wednesday that he was more than happy with the verdict.
"The jury was super attentive and carefully considered all the evidence," Caldwell said.
Apple, meanwhile, issued a stinging statement citing the verdict as evidence that the U.S. needs to overhaul its patent system.
"Smartflash makes no products, has no employees, creates no jobs, has no U.S. presence, and is exploiting our patent system," Apple spokeswoman Rachel Wolf said in the statement. "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."
From the Response to Apple:
Both Apple and Lance Armstrong have much in common. Both are inveterate liars and cheaters. Both try to pummel to the point of destruction any opposition through the legal system with a seemingly inexhaustible supply of cash.
Whereas the legal system is supposed to be equitable and to expose the truth, did it in fact do that in Armstrong's case? Both Armstrong and Apple are/were able to use it as a weapon. The legal system did nothing to expose the lies and deceptions of Armstrong. It, in fact, protected him from justice. Apple does the same thing. Point being, with money and expertise you are able to manipulate the legal system to your advantage.
But not all the time and not in the end. Sorry, Lance.
Let's look at Apples statement.
First, Smartflash "makes no products." So what? The U.S. patent system does not require anything regarding "making products". In fact, it is rather specific in NOT requiring the patent to be put to use. It is a monopoly right to use or not use. This statement by Apple has no basis in patent law and in inapplicable to the decision.
Second, Smartflash "has no employees" and "creates no jobs". Look who's talking! Who’s calling the kettle black? (From NY Times article "How the U.S. Lost Out on iPhone Work):
"Not long ago, Apple boasted that its products we're made in America. Today few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas...Apple employes 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apple's contractors: an additional 700,000 people engineer, build and assemble iPods, iPhones and Apple's other products. But almost NONE OF THEM WORK IN THE UNITED STATES. Instead they work for foreign companies in Asia, Europe and elsewhere, at factories that almost all electronic designers rely upon to build their wares..."
And who was behind the move out of the United States? "But by 2004, Apple had largely turned to foreign manufacturing. Guiding that decision was Apple's operations expert, Timothy D. Cook...for Mr Cook, the focus in Asia "came down to two things", said a former high-ranking Apple executive. Factories in Asia "can scale up and down faster" and "Asian supply chains have surpassed what's in the U.S."
How is that move to Asia been, Timmy? The NY Times has an exhaustive article on Apple's foreign labor practices (In China, Human Costs Are Built Into an iPad- January 25, 2012. Recently have been about 18 suicides at the Foxconn factory in Shenzhen, China where they assemble the iPad. A study by a collaboration of 20 Chinese universities drew up an 83 page report that concluded Apple's factories were the same as a "labor camp". A former Apple employee said, We've known about labor issues in some factories for four years, and they're still going on. Why? Because the system works for us."
Per the article, " Banners on the walls warned the 120,000 employees:"Work hard on the job today or work hard to find a job tomorrow" Apple's supplier code of conduct dictates that, except in unusual circumstances, employees are not supposed to work more than 60 hours per week. But at Foxconn, some worked more, according to interviews, workers' pay stubs and surveys by outside groups. Mr. Lai was soon spending 12 hours per day, six days a week inside the factory, according to his paychecks. Employees who arrived late were sometimes required to write confession letters and copy quotations. There were "continuous shifts", when workers were told to work two stretches in a row, according to interviews.
Mr. Lai's college degree enabled him to earn a salary of around US$22 per day, including overtime - more than many others."
A current Apple executive states, " You can either manufacture in comfortable, worker-friendly factories, or you can re-invent the product every year, and make it better and faster and cheaper, which requires factories that seem harsh by American standards...and right now customers care more about a new iPhone than working conditions in China."
Third: Smartflash "has no U.S. presence". Look who's talking, again? In addition to the above mentioned U.S. presence related to Employees and job creation, there is the issue of TAXES. I, as a U.S. citizen who lives overseas, need to pay taxes on my worldwide income. Yet, Apple, a U.S. company, pays ostensibly no U.S. taxes on billions upon billions of income.
Apple in sum, has a de minimis US labor force, it has an extensive overseas labor force which in many areas is suffering in abusive conditions and furthermore pays no taxes to its country of domicile.
Fourth: Smartflash is "exploiting our patent system to seek royalties for technology Apple invented". Humm....Apple has been exploiting the legal system, using it as a sword or shield as the situation warrants, a la Armstrong. Apple shows nothing but distain for the U.S. legal system by suggesting that if the courts decide in Apple’s favor they are clearly right, but if they decide against Apple they are clearly wrong. Apple has taken full advantage of the U.S. legal system, which they have failed to support by not paying taxes. Apple’s arrogance is breathtaking.
Fifth: Apple’s protestations that they are innocent of wrongdoing and their noble statement that they are “true innovators” is indeed endearing. Has Apple forgotten that they have a long rap sheet? They are currently the defendant in many law suits and have already been ruled infringers in several other law suits, VHC and Smartflash among them. Their protestations have the same effect of a career criminal, with a long rap sheet, protesting his innocence for a crime he has already been convicted of.
Apple should not try to outrace Armstrong. He was fast and his strategy worked for many years. In the end Armstrong lost, as Apple surely will.
