Patent Troll Sues Apple over Their Complete Line of Touch Products

Jun 5, 2012

By Kerrie Spencer, staff writer – June 5, 2012

Once again, it appears another patent troll is trying to get imaginary damages out of a patent they took over to specifically sue others.

If you want a little excitement in your life, you might want to try following the latest happenings in the patent infringement arena. Never a dull moment, and someone, or rather, a bunch of people, are making some nice money by trolling for patents. The method is buying them and suing, without actually doing anything with the patents. We recently ran an article about Twitter and patent trolls in May, 2012, discussing their Innovator’s Patent Agreement, and how they hoped that agreement would stop situations just like this case. (1)(2)(3)(4)(5)

In this case, FlatWorld, a Pennsylvania outfit, has launched a patent infringement lawsuit against Apple. The suit covers just about the complete line-up of Apple’s touch-related products (6), which is extensive. The main thing worth noting though is that this company is suing over technology that is not really associated with Apple’s multi-touch technology. Confused yet?

If the patent lawsuit does not link to Apple’s actual technology, then what on earth is going on? That is a tough question to answer, and it mostly involves imaginary or phantom damages, for how can someone sue for something that does not exist? Evidently, it’s the thing to be doing lately, because there is money to be made using such an approach.

A quick peek at the patents in question (RE43,318 and 6,920,619) really does not make the issue any clearer. In fact, it befuddles those who read them and quickly come to the understanding that apples and oranges do appear similar. The patent background says the inventor created a tool with a touch screen to let kids use their hands to manipulate objects on a screen, and hide them behind other things on the screen. That description does not really apply, except in a very vague way to Apple’s innovative and first multi-touch Magic Mouse, or any of Apple’s iDevices. Nevertheless, FlatWorld hired a lawyer and filed a patent infringement lawsuit.

None of this makes much sense to the public, but still, a company flagrantly insists they have been damaged in some indefinable way. A company took assignment of a patent just because they could sue someone and make claims they were harmed. FlatWorld does not even have any products that are similar to Apple’s line-up. (7)

This whole bizarre rush to sue seems to only be relevant in the legal arena, where phantom damages are made to appear real. So much for trying to understand the justice behind patent trolls suing and winning something they had no rights to in the first place. However, according to this latest patent infringement lawsuit, FlatWorld now owns all rights, interests and title to both of the patents, originally filed by an inventor by the name of Slavoljub Milekic, a Professor of Cognitive Science & Digital Design at the University of the Arts in Philadelphia. (8)(9)

In legal jargon, the FlatWorld suits alleges that Apple infringed on ‘their’ patents on a huge scale and that it was done with full knowledge of, and in spite of, the existing patents. And here is the real nugget of this suit. FlatWorld insists it has sustained economic damages, in an amount to be revealed during the trial, but that the amount would not be less than what is deemed to be a reasonable royalty for each infringement. There lies the secret to how patent trolls make money. Sue for an infringement that may or may not exist, then wait for the company to offer to settle out of court for less than they might be penalized in court. Nonetheless, the sums settled for depending on the case, can be astronomical.

For instance, one of the largest patent infringement lawsuits features Oracle suing Google. You may recall we mentioned that Oracle bought Sun Microsystems for $7.3 billion, a bundle that included Java programming which Google implements in its Android platform. There is a lot of money on the table in that suit. Equally as contentious, is the Apple vs. Samsung battle, over patent infringement relating to an assortment of mobile devices.

More often than not, the first thing people want to know about these kinds of legal actions, is how much money the winner will take home. There is something dreadfully wrong with that kind of attitude, when it allows people with no real right to sue, the chance to snatch money from thin air. Some may say there is something wrong with a justice system that would countenance patent trolls suing and winning for something they do not actually make, use or produce. It’s food for thought.

A counterargument suggests patent trolls have a useful purpose. Or rather play a useful role in the technology industry as it relates to intellectual property? The debate over this issue goes two ways. One side says they ought to be dragged out at dawn and shot. The other side says, they spur inventors and companies to adequately protect their intellectual property and not sell it willy-nilly.

Actually, the biggest issue is that juries are being allowed to settle some of these lawsuits without really understanding the complete story behind how patent trolling works. (10) The more juries weigh in with big bucks in damages for questionably violated patent rights, the more expensive and ridiculous the whole process becomes, which makes one wonder how all the kerfuffle got started.

Anyone recall the Research in Motion (RIM) debacle of 2005? That’s the year they had to pay out $612.5 million in a settlement for a mobile email patent infringement case with NTP, a patent holding company that did sell services or products, but sued and won over smoke and mirrors. Many considered that to be the ultimate injustice. Which side of the fence are you on?