Apple Heads to Trial With Inventor Over Smartphone Patent
By Edvard Pettersson - Nov 12, 2013 12:00 AM ET
Apple Inc. (AAPL), the world’s most valuable technology company, faces a trial over claims by a California inventor that a patent he holds covers key features of the iPhone.
Apple maintains the NetAirus Technologies LLC patent is invalid because the technology was known long before the company filed its patent.
The company owned by inventor Richard L. Ditzik filed the patent application in 1997 for a handheld device that combines computer and wireless-communications functions over both a local-area network and a wide-area network. Jury selection is set to start today in Los Angeles federal court in the lawsuit, filed 3 1/2 years ago by NetAirus.
Apple said in court filings that its Newton message pad, with add-on hardware, could perform the same functions as those claimed by NetAirus’s patent as early as 1994.
“The technology at issue was so well known at the time NetAirus filed its patent, that independent patent watchdogs have made NetAirus’s patent a poster child in the movement to limit the proliferation of facially invalid patents,” Apple said in its July 2011 request to throw out the case.
U.S. District Judge John A. Kronstadt last year allowed NetAirus to proceed on its claim that the iPhone infringes its patent for a mobile phone configured as a personal digital assistant that switches between a Wi-Fi and a cellular network connection. The judge denied NetAirus’s request to amend its complaint to include newer Apple products, including the iPad and later models of the iPhone.
In May, Apple won a ruling that NetAirus can’t seek damages for alleged infringement that occurred before Oct. 8, 2012, when the U.S. Patent and Trademark Office issued a reexamination certificate that the judge agreed “substantially” changed the patent’s claims. The ruling narrows the potential damages to sales of iPhone 4 models after that date.
NetAirus filed a new complaint against Apple in May for patent infringement by the iPad, iPhone 4S and iPhone 5.
In a pretrial ruling on Nov. 8, the judge excluded testimony from NetAirus’s damages expert, Joseph Gemini. His opinion that the royalty rates for NetAirus’s technology should be $3 a unit for one patent claim and $3.50 a unit for five other claims lacks quantitative analysis and isn’t reliable, according to the judge’s order.
The judge also barred testimony from Ditzik that a royalty rate of 3 to 5 percent of U.S. sales would be reasonable.
“An opinion setting forth a 3-5 percent royalty rule of thumb based on ‘patent articles on the web’ is improper expert opinion offered by a lay person,” the judge said.
In a separate case in federal court in San Jose, California, also scheduled for jury selection today, Apple and Samsung Electronics (005930) Co. are having a retrial over how much Samsung should pay for infringing the iPhone maker’s patents. A judge cut $450.5 million from a $1.05 billion jury award in 2012 after finding the verdict was based on a miscalculation.
The case is NetAirus Technologies LLC v. Apple Inc., 10-03257, U.S. District Court, Central District of California (Los Angeles).
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