Apple Inc. was successful in having a $308.5 million patent infringement decision overturned. Personalized Media, the plaintiff, has hundreds of patents and is suing Apple, Google, Netflix, and others for infringement based on decades-old technology.
The Judgement (Click here to read full Judgment)-
According to a federal judge, the iPhone maker was the victim of a company’s plot to milk the tech industry for huge royalties on old concepts.
According to US District Judge Rodney Gilstrap, Personalized Media Communications LLC had a patent for digital rights management that is unenforceable. It is so because the company intentionally delayed its application at the USPTO to get more money later. According to Gilstrap, personalized Media will “take nothing” and instead be responsible for some of Apple’s legal expenses.
Personalized Media’s patent application comes from the 1980s, when a patent’s term was set at 17 years, regardless of how long the application procedure took. Despite the fact that the corporation filed hundreds of patent applications in the late 1980s and 1990s, no patents were awarded until 2010 — and since then, 101 have been given.
Gilstrap cited a June decision by the nation’s top patent court that made it simpler to challenge so-called submarine patents. Applicants delay issuing a patent until after the industry has embraced the technology, and infringement cases are more profitable. Patent terms have been 20 years from the date of application since 1995, making submarining impossible.
GATT’s Bubble
Submarine patents have been a source of contention for decades. The legislation altered with the Uruguay Round of the General Agreement on Tariffs and Trade (GATT). Prior to June 8, 1995, applications had a 17-year term from the date of issuance. Following that, applications had 20 years from the date of filing. As the change took effect in the spring of 1995, there was a patent application gold rush known as the “GATT Bubble.” For example, applicants filed almost 50,000 applications in the nine days leading up to the shift (about a fourth of the entire year’s anticipated filings). The GATT Bubble flood was so big that the PTO hired hundreds of patent examiners to process it in 1995 and 1996.
How Submarine Patents Worked
The start date is the main distinction between the pre-1995 17-year patent period and the present 20-year patent term. The clock is currently ticking down on the 20 years after filing a patent application. There are provisions to increase the 20-year calculation by some time. These clauses are mainly used to account for government delays, such as lengthy patent reviews or FDA approval delays. The 17-year patent term, on the other hand, does not begin until the patent is actually issued. As a result, you don’t let your patent application “grant” when the patent examiner “allows” it. Your 17-year term would begin then. Instead, you file a “continuation” to keep the case “underwater” or “pending.” Competitors develop and embrace technology during this time. You eventually let your submarine patent “surface” once the industry embraces the technology. This marks the beginning of your 17-year patent period. However, now that technology is more widely available, you have more power to impose a settlement or compensation. The move to a patent term that began at filing was driven by this “gaming” of the patent system. However, whether ethical or not, this was entirely legal at the time. Jerome H. Lemelson is well-known for filing several submarine patents and collecting nearly $1.3 billion in royalties. Finally, in 2004, a key ruling held that patents of this type were “unenforceable” under the law of laches.
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