Licensing firms are often referred to as patent trolls because their business model relies on buying patents then suing companies for infringement. Although what they do is legal, these companies are often viewed as shady because they do not produce anything of value while relying on the legal system to rake in billions in profit.
On Friday, a Texas federal court ordered Apple to pay Personalized Media Communications (PMC) $308.5 million in a patent dispute related to digital rights management software called “FairPlay.” FairPlay encrypts distributed digital content such as that from iTunes, Apple Music, and the App Store. A jury reckoned that Apple’s algorithms were close enough to FairPlay’s that it rendered in favor of PMC.
PCM initially filed the lawsuit in 2015, but the Patent Trial and Appeal Board (PTAB) dismissed the case as invalid. A US appeals court later reversed PTAB’s decision. Apple again moved to dismiss in US District Court in 2016, but the judge denied the motion, allowing a federal jury in Marshall, Texas, to hear arguments. Marshall is a Mecca for patent troll cases because juries tend to favor the plaintiff.
“Cases like this, brought by companies that don’t make or sell any products, stifle innovation and ultimately harm consumers,” an Apple spokesperson told Bloomberg. The tech giant plans to appeal the decision.
IPWatchdog notes, Personalized Media Communications is a licensing firm owning 98 patents as of 2019 and has a history of patent litigation. It lost a 2019 lawsuit against YouTube last year and currently has pending patent infringement cases against Amazon, Google, and Netflix.
The multimillion-dollar ruling came on the same day Brazilian regulators fined Apple $2 million for not including chargers with the iPhone 12. The Cupertino firm’s legal team is also busy facing lawsuits from regulators, multiple app makers, and Epic Games over its App Store terms of service.