Apple to pay $308.5 Million to Licensing Firm Over Patent Infringement

Originally posted on Bloomberg News on March 20, 2021

A federal jury in Marshall, Texas on March 19 ruled that Apple must pay $308.5 million to Personalized Media Communications (PMC) in connection to a patent infringement lawsuit related to digital rights management. Licensing firm PMC had sued Apple in 2015, alleging that the tech giant infringed its patent with technology including FairPlay, which Apple uses for the distribution of encrypted content from its iTunes, App Store and Apple Music apps.

The jurors told Apple to pay a running royalty to PMC, which usually depends on the level of sales or usage of a product or service. One expert for PMC estimated $240 million in royalties owed by Apple. The tech giant has said it will file an appeal.

Although Apple previously successfully challenged the validity of PMC’s patent at the U.S. patent office, an appeals court in March 2020 reversed the decision, making way for the trial.

Sugar Land, Texas-based PMC was granted a patent in 2013 called “Signal Processing Apparatus and Methods,” which outlined the process of encryption and decryption of digital content. The 2015 lawsuit claimed that Apple and PMC held various meetings discussing how PMC’s patents could be applied to Apple’s products and services, including FairPlay. Apple later infringed on this patent when creating its own digital rights management technology. The lawsuit alleged that Apple used exactly the same method outlined in PMC’s patent to decrypt software on devices, including on iPhones and Macs.

The lawsuit said that the harm caused to PMC was irreparable, and that Apple also induced “its customers and the general public to commit infringing acts.” PMC’s lawsuit not only sought injunctive relief to prevent Apple from further infringing its patents, it also demanded a recovery of monetary damages resulting from the infringement.

“Cases like this, brought by companies that don’t make or sell any products, stifle innovation and ultimately harm consumers,” Apple said in an emailed statement to Bloomberg.

PMC currently has a case against Netflix pending in New York.

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