Apple Inc. (AAPL) gets sued by European “patent troll,” joins Google in curbing patent abuse

Posted Feb 5, 2014

Apple Inc. (NASDAQ:AAPL) has been sued for $2 billion by a “patent troll” called IPCom. IPCom is seeking damages of over ?1.57 billion ($2 billion) for alleged infringement of a European patent that is essential to 3G and LTE devices. Apple and several other companies including Nokia, HTC, and Vodafone challenged the validity of the patent, but the European Patent Office held up a narrower version of the patent last month.

IPCom agreed to license their patents on (fair, reasonable, and non-discriminatory) terms, but the company has been appearing in court regularly over the last several years. IPCom has used the same patent (EP 1 841 268) to sue Nokia and several other companies.

This patent covers technology that lets a device receive priority on a network in case of an emergency even if the network is congested. IPCom acquired this patent from another company. When a company focuses primarily on licensing mobile communications patents, they become colloquially known as a “patent troll.”

IPCom also alleges infringement of a German patent that involves cell network communications. The odds are pretty high that Apple wil end up licensing at least one of the two patents if it is found that they are infringing on them.

Apple is getting tired of being sued by patent trolls so they have partnered with Google Inc (NASDAQ:GOOG) to curb frivolous patent suits that costs millions of dollars in legal fees. The two tech giants are asking the U.S. Supreme Court to allow them to fight back. Apple and Google are leading several firms to urge the court to make it easier for collect attorneys’ fees from patent-holders that lose infringement lawsuits.  There are two cases that are being argued this month where the justices will consider rules that governs fee awards in patent litigation.

Google and Apple have been sued over 190 times in the last five years. In every case that reaches court, Apple receives dozens of letters that demands royalties. If the tech companies receive a favorable Supreme Court ruling, it would be less profitable for patent trolls to bring frivolous claims to courts.

There were over 100,000 companies that were threatened in 2012 with patent infringement lawsuits by businesses that try to extract royalties. “Patent trolls” filed around 19% of all patent lawsuits between 2007 and 2011.

Apple Inc. (NASDAQ:AAPL) is facing 228 unresolved patent claims and employs two attorneys whose job is to respond to letters that demand royalties. Apple was sued 92 times by patent-assertion entities in the last three years and settled 51 cases. The patent-assertion entities have an unfair advantage because they do not make products on their own, which leaves them immense from counter-lawsuits.

[Sources: TheVerge/Bloomberg]