Apple Inc. (NASDAQ:AAPL) has been suing various companies over the last two years for patent violations. Apple has been particularly hard on companies that support Android as late CEO Steve Jobs was quoted in his biography as saying that he would he would spend his “last dying breath” to “destroy Android.” It turns out that Apple is in cahoots with a company called Digitude Innovations, a Virginia-based company that filed lawsuits with the ITC against RIM, HTC, LG, Motorola, Samsung, Sony, Amazon, and Nokia over patent violation. The ITC is known for being able to block product imports before lawsuits have actually concluded.
Digitude Innovations launched in 2010 and they have raised $50 million in funding from Altidude Capital Partners. Digitude’s business model is to acquire and license key technology areas within the consumer electronics space as part of a patent consortium. So basically they buy patents and sue other companies until a settlement is made. Some companies are forced to pay licensing fees since it would be less expensive than taking the lawsuit to court. Some people would call Digitude a “patent troll.”
This past April, Digitude announced ?completion of its first such strategic partnership with one of the world?s leading consumer electronics companies.? Other companies have also joined Digitude’s consortium and they will receive proceeds based on the value of the IP that each party contributed. One of these companies is Apple, who transferred patent #6208879 and #6456841 to Digitude. Patent #6208879 is “Mobile Information Terminal Equipment and Portable Electronic Apparatus” and Patent #6456841 is “Mobile Communication Apparatus Notifying User Of Reproduction Waiting Information Effectively.”
Apple transferred the patents to a company called Cliff Island LLC, which transferred it to Digitude Innovations. Apple has transferred roughly about a dozen patents to Cliff Island LLC. Cliff Island LLC only exists in name and there is no information about the company online. However The patent filing address belongs to an office that is in the same building as Digitude’s investors Altitude Capital.
It is possible that Digitude is being used by Apple as a “hired gun” for their patent lawsuits, but Apple seems to be pretty vocal about who they are suing. The other scenario is that Apple gave Digitude some of their patents as part of a settlement assuming that they were sued previously by Digitude. It seems shocking that Apple would hand over their patents over to a “patent troll” given the arsenal of lawyers they must have on retainer. There is obviously one side of the story we don’t know about here.