Apple’s Declaratory Judgment Backfires, Turns Into $145.1M Damages Verdict Wi-LAN

By Steve Brachmann
August 14, 2018

https://depositphotos.com/61513531/stock-photo-court-gavel.html

On August 1st, a jury verdict entered in the Southern District of California awarded $145.1 million in reasonable royalty damages to Canadian IP licensing firm Wi-LAN in a patent infringement case against Cupertino, CA-based consumer device giant Apple Inc. The jury determined that Apple infringed upon claims of two patents owned by Wi-LAN:

  • U.S. Patent No. 8457145, titled Method and Apparatus for Bandwidth Request/Grant Protocols in a Wireless Communication System. Issued to Wi-LAN in June 2013, it covers a method for requesting bandwidth in a wireless communication system including a plurality of subscriber units in communication with an associated base unit in a way that efficiently processes and responds to bandwidth allocation requests.
  • U.S. Patent No. 8537757, titled Adaptive Call Admission Control for Use in a Wireless Communication System. Issued to Wi-LAN in September 2013, it claims a subscriber station for a wireless communication system configured to control the admission of new connections and the suspension of existing connections between a base station and customer premise equipments.

Though this is not the only lawsuit fought out between Wi-LAN and Apple, this particular action began in June 2014 when Apple filed a complaint seeking a declaratory judgment of invalidity on the ‘145 and ‘757 patents along with three other Wi-LAN patents. Apple’s complaint notes that Wi-LAN “has been solely in the business of acquiring and asserting patents,” an obvious ploy to try to paint Wi-LAN as a patent assertion entity (PAE) and, by extension, a troll. That argument is a poison pill which has been swallowed by disreputable publications such as Fortune (not the first time that particular magazine has engaged in making such derogatory and false statements in order to inflame its reading public). Of course, as anyone who is interested in performing about two seconds worth of research will see with their own eyes, Wi-LAN has acquired the patents infringed by Apple through its own research and development and not, as Apple would have people believe, through an acquisition campaign which is typical of PAEs.

In October 2014, after Apple filed a second amended complaint in the case, Wi-LAN filed a counterclaim answering Apple’s claims of non-infringement and invalidity; it also asserted the five patents against Apple in the filing. Wi-LAN alleged that Apple’s sale of iPhones and other devices that are 4G LTE-compliant infringed upon the patents-in-suit. “Apple’s infringement gives Apple an unfair advantage over its competitors, all of whom have chosen to do the right thing and license their use of Wi-LAN’s wireless technologies and patents,” Wi-LAN’s counterclaim reads. Wi-LAN noted that its asserted patents were developed by a team led by Ken Stanwood, CEO of Wi-LAN’s wholly-owned subsidiary Cygnus Broadband. At the time of Wi-LAN’s counterclaim, Stanwood had been awarded 87 U.S. patents and had more than 100 patent applications pending at the U.S. Patent and Trademark Office. Stanwood’s work helped Wi-LAN to become the world’s first company to build Wi-Fi and 4G data speeds into mobile devices about a decade before 4G became standard in the wireless industry.

Wi-LAN’s counterclaims also detail early discussions with Apple which ended up breaking down, a story which is familiar with many innovators who have been taken advantage of by the efficient infringement cabal. Wi-LAN engaged Apple in discussion years prior to Apple’s introduction of its own 4G LTE devices to show Apple a blueprint detailing how Wi-LAN’s wireless technologies would enable computers and mobile devices to stream video and connect to the Internet. “Apple arrogantly dismissed Wi-LAN’s wireless technologies and vision at the time, believing that if it was not invented by Apple it was not possible,” Wi-LAN’s counterclaim reads. However, Apple incorporated Wi-LAN’s technologies into its devices, a fact which is borne out by the jury verdict in this case. Wi-LAN alleged that it had attempted to engage Apple in licensing discussions for a year prior to Apple filing for declaratory judgment.

 

Image Credit: Deposit Photos.

The Author

Steve Brachmann

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 12 Comments comments. Join the discussion.

  1. Jason Lee August 14, 2018 9:34 am

    Just saw this link about “The Shredding of the US Patent System”

    https://www.youtube.com/watch?time_continue=102&v=wPL-RZeRN0Q

    Amazon, Apple Google, Microsoft, Facebook have been getting away with with murder by stealing patents because of laws they helped push threw like the AIA Act and the PTAB. It should not surprise anyone that America has fallen from being ranked 1st in the world wide patent market to 12th. Owning a patent has no value in the States, America is pushing out its inventors that are going to file over seas as there is no protection and no value holding a patent in the United States. Plus why would any investor invest if the PTAB will kill off the patent. Patents have fallen in value by 80% since the introduction of the American Invents Act back in 2011. Not looking good for inventors at all, I hope things change.

  2. Benny August 15, 2018 5:16 am

    Jason,
    First, owning a patent overseas has no value in the US. Owning a patent in the US has no value overseas.
    Second, according to the article Wi-Lan stated that Apple’s competitors obtained a license for Wi-Lan’s patents, proving that there is in fact value in a US patent.

  3. Disenfranchised Patent Owner August 15, 2018 8:52 am

    “Wi-LAN has acquired the patents infringed by Apple through its own research and development and not, as Apple would have people believe, through an acquisition campaign…”

    Why should this matter? I call it “practiced obfuscation” to raise this point.

  4. Jason Lee August 15, 2018 9:55 am

    Benny;

    If you hold a patent in the U.S. and in Europe/Asia there is value. Second $145 rewarded is minuscule in comparison with the amount of money Apple was able to make off of these patent. WiLAN should of been rewarded $1-2 Billion in damages seeing that Apple would not of had an iPhone if it was not for WiLANs 4G LTE patent invented by Ken Stanwood who is the CTO at WiLAN. Apple is a Trillion dollar company and they hold hundreds of billion off shore, they have bought the system, this needs major reform. If you do some research you will see that patent values have dropped by 80%. Billions have been stolen from patent inventors by Silicon Valley, If this does not get fixed people will be looking and are looking for other countries that provide a fair value for their IP.

  5. Benny August 15, 2018 10:18 am

    Jason Lee,
    In response to your second comment, both patents mentioned in the article have no EU or CN equivalent, and for both patents the first named inventor is not a US citizen and apparently lives outside the US. To put this particular case in perspective, then, Apple’s profits from the use of the patents represents only the profits from the iphones (and not software or other products) sold in the US (they are not manufactured in the US), furthermore, it is not just US inventors getting helixed (nor even a US company, since WiLAN appears to be Canadian).

  6. Jason Lee August 15, 2018 11:50 am

    I was not linking WiLAN’s patents I was stating future patent applicants in general will be looking to do a wider filing seeing the AIA and the PTAB has killing the patent market by 80% in the US. With out a major cash penalty for infringing, companies like Apple will continue their theft as the cost dollars are well worth the risk. Lets hope the new USPTO director and the 5 new bills introduced into congress catch wind and become law. The system works much better when their is a even flow of cash to inspire new inventors to invent and to be able to attract investors. The current system in place has caused a major a deterrent from investors to invest and inventors to create. The oligarchy in place must be reformed by Government in order to achieve confidence in the current deeply flawed patent system. $145 Million or even $300 Million rewards will not stop the current siphoning of IP from inventors. Penalties must go up for infringers or new laws must be passed to protect the life blood of Americas economy.

  7. Jason Lee August 15, 2018 11:52 am

    I was not linking WiLAN’s patents I was stating future patent applicants in general will be looking to do a wider filing seeing the AIA and the PTAB has killing the patent market by 80% in the US. With out a major cash penalty for infringing, companies like Apple will continue their theft as the cost dollars are well worth the risk. Lets hope the new USPTO director and the 5 new bills introduced into congress catch wind and become law. The system works much better when their is a even flow of cash to inspire new inventors to invent and to be able to attract investors. The current system in place has caused a major deterrent from investors to invest and inventors to create. The oligarchy in place must be reformed by Government in order to achieve confidence in the current deeply flawed patent system. $145 Million or even $300 Million rewards will not stop the current siphoning of IP from inventors. Penalties must go up for infringers or new laws must be passed to protect the life blood of Americas economy.

  8. Ron Katznelson August 15, 2018 12:10 pm

    Jason @4: “$145 rewarded is minuscule.
    Indeed. However, damages at law may not be all that Apple will be ordered to pay. There is little doubt that Apple’s infringement was willful – Wi-LAN alleged that the parties had discussions on these patents a year before, and it was Apple that first sued for DJ. At this point I wonder whether the court could also award Wi-LAN equitable relief for willful infringement, award that may be up to treble the damages amount depending on the circumstances of the case and the reasonableness of Apple’s arguments in its DJ. The proceedings on willfulness, if any, may be more revealing than the underlying case.

  9. Wayne Borean August 15, 2018 2:58 pm

    Apple did deliberately infringe. There is no doubt about that. If you visit the 3GPP website, Wi-LAN is listed as holding Essential Patents. You can read that for yourself here (PDF Warning)

  10. Jason Lee August 16, 2018 9:01 am

    Ron;
    I agree there is very little doubt this was willful infringement by Apple as the jury in California concluded in favor of WiLANs patents to of been infringed. Apple knew they were stealing and got away with it for well over a decade. Apple needs to be made an example of a $1-2billion dollar fine for infringing would set a precedent and a greater deterrent for future companies looking at stealing. Companies like Apple need to be held accountable just like everyone else. Let’s hope the justice system starts to get it right. Inventors like “bunch of balloons” and WiLAN were robbed and need to get paid.

  11. Benny August 16, 2018 10:38 am

    Jason,
    “…a 1-2 billion dillar fine…”
    I like your grasp of economics. The difference between 1 and 2 billion is 1,000,000,000 , not an insignificant hyphen. You want to put a little more thought into figures that size.

  12. Jason Lee August 16, 2018 4:02 pm

    Benny what ever dollar amount that would effect the stock price of Apple to make them think twice before ignoring the requests in signing a licence and to help deter future theft of patent holders. Stealing IPs from inventors and using the loop holes created by Google and Apple from paying is criminal . As Mr. Iancu in April of this year addressing the U.S. Chamber of Commerce Patent Policy Conference eloquently put it :

    “I don’t need to tell this audience that the American patent system, which in prior years was deservedly ranked as the number one system in the world, in 2017 fell to number 10. And this year it fell further, tied for number 12…….

    Still, we are at an inflection point with respect to the patent system. As a nation, we cannot continue down the same path if we want to maintain our global economic leadership. And we will not continue down the same path. This administration has a mission to create sustained economic growth, and innovation and IP protection are key goals in support of that mission.

    The U.S. is rightly calling out China for stealing intellectual property, but how valid is the complaint when American patent holders are not protected from their own home-grown thieves? There is some irony and even hypocrisy to be found here.”

Post a Comment

Respectfully add to the discussion.

Name *
Email *
Website

Our website uses cookies to provide you with a better experience. Read our privacy policy for more information.Accept and Close