A Texas jury ruled that Apple's iTunes software infringed three patents. Apple says it'll appeal. Fred Katayama reports.
A blow to Apple: a federal jury in Texas ordered the iPhone maker to pay more than half a billion dollars. It ruled that Apple's iTunes software had infringed three patents owned by the patent licensing firm, Smartflash. The jury found that Apple used the Texas firm's patents willfully and without permission. The patents cover the access and storage of songs, videos, and games that are downloaded. Smartflash says Apple knew about its technology. In its lawsuit, it says that around 15 years ago, the co-inventor of its patents had discussed its technology with an executive who now works as a senior director at Apple. Apple argued that the technology was already out there, saying previously patented inventions covered the same ground. Smartflash said it was happy with the verdict. Apple says it'll appeal. It had earlier tried to have the suit thrown out, but the district judge ruled against that. Investors didn't seem worried. Apple's shares dipped in early trading. The damages it's ordered to pay doesn't even amount to one day's worth of Apple's sales in the last quarter. Piper Jaffray senior analyst Gene Munster said, "It's a classic patent troll case against Apple. It's a speed bump. It doesn't impact any of Apple's products. This is a lot of money, but not for Apple." Smartflash could stay in the spotlight. It has also sued Google, Samsung and HTC.