Category: Apple Legal News

Apple and Nokia Settle Patent Dispute

After a long running dispute over a number of patents Apple and Nokia have settled the suit. The settlement covers all patent litigation between the companies, including the withdrawal by Nokia and Apple of their respective complaints to the US International Trade Commission.

The dispute first began in October 2009 and was extended a number of times. Apple also countersued Nokia for patent infringement.

The agreement consists of of a one-time payment payable by Apple and on-going royalties to be paid by Apple to Nokia for the term of the agreement. The terms of the agreement beyond this information is confidential.

In a statement Stephen Elop, president and chief executive officer of Nokia said, “We are very pleased to have Apple join the growing number of Nokia licensees” adding, “This settlement demonstrates Nokia’s industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market.”

Apple Responds to Lodsys Patent Threats

Apple has today stepped into the dispute over In-App purchases which Lodsys claims infringes one of its patents and has asked iOS developers to license it from them. Apple has today sent out information to iOS developers with documentation outlining the Lodsys patent and a letter to Lodsys CEO, Mark Small.

As reported by The Loop in the letter to Small, Bruce Sewell, Apple’s Senior Vice President and General Counsel writes, “Apple is undisputedly licensed to these patents and the App Makers are protected by that license”.

The opening paragraph in the letter to Small reads:

There is no basis for Lodsys’ infringement allegations against Apple’s App Makers. Apple intends to share this letter and the information set out herein with its App Makers and is fully prepared to defend Apple’s license rights.

Apple is asking Lodsys to withdraw its letters to developers asking them to license the patent saying that the letters are a “fundamental misapprehension regarding Apple’s licese and the way Apple’s products work” and that the information provided by Apple should be “sufficient for you to withdraw your outstanding threats to the App Makers”.

Apple explains its license as follows:

Thus, the technology that is targeted in your notice letters is technology that Apple is expressly licensed under the Lodsys patents to offer to Apple’s App Makers. These licensed products and services enable Apple’s App Makers to communicate with end users through use of Apple’s own licensed hardware, software, APIs, memory, servers, and interfaces, including Apple’s App Store. Because Apple is licensed under Lodsys’ patents to offer such technology to its App Makers, the App Makers are entitled to use this technology free from any infringement claim by Lodsys.

Full letter sent from Apple General Counsel Bruce Sewell to Lodsys CEO, Mark Small:

Dear Mr. Small:

I write to you on behalf of Apple Inc. (“Apple”) regarding your recent notice letters to application developers (“App Makers”) alleging infringement of certain patents through the App Makers’ use of Apple products and services for the marketing, sale, and delivery of applications (or “Apps”). Apple is undisputedly licensed to these patent and the Apple App Makers are protected by that license. There is no basis for Lodsys’ infringement allegations against Apple’s App Makers. Apple intends to share this letter and the information set out herein with its App Makers and is fully prepared to defend Apple’s license rights.

Because I believe that your letters are based on a fundamental misapprehension regarding Apple’s license and the way Apple’s products work, I expect that the additional information set out below will be sufficient for you to withdraw your outstanding threats to the App Makers and cease and desist from any further threats to Apple’s customers and partners.

First, Apple is licensed to all four of the patents in the Lodsys portfolio. As Lodsys itself advertises on its website, “Apple is licensed for its nameplate products and services.” See Under its license, Apple is entitled to offer these licensed products and services to its customers and business partners, who, in turn, have the right to use them.

Second, while we are not privy to all of Lodsys’s infringement contentions because you have chosen to send letters to Apple’s App Makers rather than to Apple itself, our understanding based on the letters we have reviewed is that Lodsys’s infringement allegations against Apple’s App Makers rest on Apple products and services covered by the license. These Apple products and services are offered by Apple to the App Makers to enable them to interact with the users of Apple products—such as the iPad, iPhone, iPod touch and the Apple iOS operating system—through the use or Apple’s App Store, Apple Software Development Kits, and Apple Application Program Interfaces (“APIs”) and Apple servers and other hardware.

The illustrative infringement theory articulated by Lodsys in the letters we have reviewed under Claim 1 of U.S. Patent No. 7,222,078 is based on App Makers’ use of such licensed Apple products and services. Claim 1 claims a user interface that allows two-way local interaction with the user and elicits user feedback. Under your reading of the claim as set out in your letters, the allegedly infringing acts require the use of Apple APIs to provide two-way communication, the transmission of an Apple ID and other services to permit access for the user to the App store, and the use of Apple’s hardware, iOS, and servers.

Claim 1 also claims a memory that stores the results of the user interaction and a communication element to carry those results to a central location. Once again, Apple provides, under the infringement theories set out in your letters, the physical memory in which user feedback is stored and, just as importantly, the APIs that allow transmission of that user feedback to and from the App Store, over an Apple server, using Apple hardware and software. Indeed, in the notice letters to App Makers that we have been privy to, Lodsys itself relies on screenshots of the App Store to purportedly meet this claim element.

Finally, claim 1 claims a component that manages the results from different users and collects those results at the central location. As above, in the notice letters we have seen, Lodsys uses screenshots that expressly identify the App Store as the entity that purportedly collects and manages the results of these user interactions at a central location.

Thus, the technology that is targeted in your notice letters is technology that Apple is expressly licensed under the Lodsys patents to offer to Apple’s App Makers. These licensed products and services enable Apple’s App Makers to communicate with end users through the use of Apple’s own licensed hardware, software, APIs, memory, servers, and interfaces, including Apple’s App Store. Because Apple is licensed under Lodsys’ patents to offer such technology to its App Makers, the App Makers are entitled to use this technology free from any infringement claims by Lodsys.

Through its threatened infringement claims against users of Apple’s licensed technology, Lodsys is invoking patent law to control the post-sale use of these licensed products and methods. Because Lodsys’s threats are based on the purchase or use of Apple products and services licensed under the Agreement, and because those Apple products and services, under the reading articulated in your letters, entirely or substantially embody each of Lodsys’s patents, Lodsys’s threatened claims are barred by the doctrines of patent exhaustion and first sale. As the Supreme Court has made clear, “[t]he authorized sale of an article that substantially embodies a patent exhausts the patent holder’s rights and prevents the patent holder from invoking patent law to control postsale use of the article.” Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617 (2008).

Therefore, Apple requests that Lodsys immediately withdraw all notice letters sent to Apple App Makers and cease its false assertions that the App Makers’ use of licensed Apple products and services in any way constitute infringement of any Lodsys patent.

Very truly yours,

Bruce Sewell
Senior Vice President & General Counsel
Apple Inc.

Apple Goes in Front of US Senate Regarding Mobile Privacy

Yesterday Google and Apple were both in front of US Senate commitee to answer questions on the “Locationgate” controversy.

The hearing which is titled “Protecting Mobile Privacy: Your Smartphones, Tablets, Cell Phones and Your Privacy” saw Guy L. “Bud” Tribble Apple’s Vice President of Software Technology and Alan Davidson Google’s Director of Public Policy be grilled on why iOS and Android collect location data and where this data is stored.

The hearing can be heard in full on the US Senate website and contains very little that wasn’t answered in Apple’s Q&A, the most telling extract is below.

Frankin: Mr. Tribble, last month I asked Apple in a letter why it was building a comprehensive location database on iPhones and iPads and storing it on peoples’ computers — when they synced up, of course. Apple’s reply to my letter will be added to the record. But this is what Apple CEO Steve Jobs said to the press: “We build a crowd-sourced database of Wi-Fi and cell tower hot spots but those can be over 100 miles away from where you are. Those are not telling you anything about your location.”

Yet in a written statement issued that same week, Apple explained that this very same data will “help your iPhone rapidly and accurately calculate its location.” Or as the Associated Press summarized it “the data help the phone figure out its location, Apple said.”

But Steve Jobs that same week said “those are not telling you anything about your location.”

Mr. Tribble, it does not appear to me that both these statements could be true at the same time. Does this data indicate anything about your location or doesn’t it?

Tribble: Senator, the data that’s stored in the database is the location of as many Wi-Fi hotspots and cellphone towers as we can have. That data does not actually contain — in our databases — any customer information at all. It’s completely anonymous. It’s only about the cellphone towers and the Wi-Fi hotspots. However, when a portion of that database is downloaded onto your phone, you phone also knows which hotspots and cellphone towers it can receive right now. So the combination of the database of “where are those towers and hotspots” plus your phone knowing which ones it can receive right now is how the phone figures out where it is without the GPS.

Apple Responds to iPhone and iPad Location Data Collection

Steve Jobs Unveils iPhone 4 at WWDC 2010

Steve Jobs Unveils iPhone 4 at WWDC 2010 | Photo by mathieuthouvenin

Apple has today officially responded to growing concern over the subject of location collection on the iPhone in iOS 4.0 and on the iPad 3G. Since iOS 4.0 data is recorded into a database of nearby Wi-Fi and cellular access points used to provide quick location fixes when needed.

Apple has released a Q&A on its website explaining the issue, highlighting that Apple is not tracking the location of iPhones and iPads, and never intends to do so.

The data recorded is sent to Apple in an anonymous and encrypted fashion and it is not possible for the data to be tied to any user but is helpful in gaining a location when requested where GPS signal is hard to obtain.

Apple also said that a number of bugs are at play in the current version of iOS, when location services are turned off it has been discovered that the database continues to grow and this will be addressed. Apple also intends to release a software update that will cease backing up of the database, reduce the size of the database of WiFi and cell towers cached on the phone and delete the cache when location services are turned off.

Apple CEO Steve Jobs has also given a telephone interview to All Things Digital, adding some colour to the issue:

Jobs said that the tech industry hasn’t done a good job of educating users on what has been a fairly complicated issue.

“As new technology comes into the society there is a period of adjustment and education,” Jobs said. “We haven’t as an industry done a very good job educating people I think, as to some of the more subtle things going on here. As such (people) jumped to a lot of wrong conclusions in the last week.”

Jobs also revealed that Apple has been asked to testify by US authorities and will do so but questions whether other phone manufacturers will come under the same scrutiny by the press.

ITC Rules in Favour of Apple in Nokia Case

The International Trade Commission ruled in favour of Apple late last week, the judge presiding over the case said that Apple did not infringe five patents belonging to Nokia.

In a report from Reuters it is noted that ITC Judge James Gildea ruled that “in his initial determination Apple did not violate the Nokia patents.”

Nokia had originally asked the court to ban the importation of Apple devices that infringed Nokia patents, at the time citing the iPhone 3GS and iPod nano as well as several Mac models. The complaint was originally filed in December 2009.

Both Apple and Nokia are suing each other over patent infringement issues in multiple venues in the US and Europe.

The next step for the ITC will be for the entire commission “to either uphold or throw out [Judge] Gildea’s decision”, the target for this decision is said to be August 1, 2011.

Jobs Ordered to Appear in iTunes Anti-Trust Case

Steve Jobs Presents on March 2 at iPad 2 Event

Steve Jobs Presents on March 2 at iPad 2 Event | Photo by sujal

Apple CEO Steve Jobs has this week been ordered to make a disposition in the ongoing “Apple iPod iTunes Anti-Trust Litigation” which first began in January 2005.

In November 2010 the plaintiffs for the case asked for permission to depose Steve Jobs and a hearing was scheduled for January 18, 2011. On January 17, 2011 Steve Jobs announced his indefinite medical leave from Apple so the hearing was “continued indefinitely, without prejudice”. It was agreed by both parties that Steve Jobs was too ill to stand.

On March 2, Steve Jobs took to the stage to announce the iPad 2 causing Magistrate Judge Howard R. Lloyd to order jobs to show up for deposition. The deposition which will take place on an unknown date will last no more than two-hours and will take place outside of a court; he will be questioned on Apple allegedly changing software to prevent digital music files engineered by RealNetworks from playing on an iPod.

“The court,” Judge Lloyd wrote, “finds that Jobs has unique, non-repetitive, firsthand knowledge about the issues at the center of the dispute over RealNetworks software.”

Apple and Nokia Litigation Crosses the Atlantic

Apple’s ongoing battle with Nokia which began in October last year has spread across the Atlantic to the UK where the company is accusing Nokia of infringing nine smartphone patents.

In a statement to the BBC Nokia stated that it was “unsurprised” by the move.

“It changes nothing in the fundamentals of the matter, which are rooted in Apple’s refusal to respect Nokia’s intellectual property and attempt to free ride on the back of Nokia’s innovation,” added a Nokia spokesperson.

Last year Nokia accused Apple of infringing 10 patents related to Global System for Mobile communications, or GSM; wireless local area network, or WLAN; and Universal Mobile Telecommunications System, or UMTS.

Apple quickly struck back in December 2010 and since then both companies have expanded their cases.

Legal News: Christopher Corsi v. Apple, CV10-03316PVT, Northern District of California

This is yet another class action complaint and was filed on July 28, 2010. The claims are nearly identical to those involving the liquid submersion indicators in the Gallion v. Apple case reported on here. Thus, I will only note where this plaintiff nuanced his argument a bit differently.

Corsi alleges that the only reason for the external submersion indicators is the amount of skill it takes to open up an iPhone and iPod as opposed to other smartphones which have user-replaceable batteries. And like Gallion, he claims this are unreliable, but also adds the following additional information:

Plaintiff is informed and believes that the Liquid Submersion Indicators are designed and marketed by 3M for use inside, not outside of electronic devices.

In this case, the phone was opened at his insistence and even though the internal indicators were clean and there was no sign of moisture, his warranty claim was denied. He also surrendered his phone and bought the discounted replacement.

As a side note, the other case mentioned by Apple, Pennington, Et Al v. Apple is a Superior Court (state court) case in Santa Clara California which would be why it was not indicated as related to the pending Federal cases. The filings are not available online.

In addition to her position as Assistant Editor at World of Apple, dizzle runs idrankthekoolaid, an Apple fangrl satire blog, and is an Administrator and Hostess at MyAppleSpace and their vidcast MASTv.

Legal News: Gallion v. Apple and DOES 1-100, United States District Court Northern District of California, Case No. 3:10-Cv-01610-RS

A Class Action Complaint was filed on April 15, 2010 against Apple and 100 Doe Defendants.  With regard to the unnamed Defendants, Plaintiff states:

Plaintiff is unaware of the true names and capacities of Does 1 through 100 and dues them by fictious names.  Plaintiff will amend this Complaint to include these Doe defendants’ true names and capacities when they are ascertained.  Each Doe defendant is responsible in some manner, including without limitations, as aiders and abettors, for the conduct alleged in this Complaint.

The case is alleged to exeed 5 billion dollars.  The products in question include the iPhone (from 3G forward) and the iPod Touch.  As is pretty commonly known, Apple’s warranties (both the standard warranty and Applecare) exclude damages caused by liquid spills or submersion.  If your iPhone falls in the toilet (even if a deposit has not already been made), it isn’t covered.

The Plaintiff alleges that Apple employees are instructed to utilize an external Liquid Submersion Indicator that is contained on the device to determine if it is damaged by moisture.  This sensor turns red or pink if the user is pregnant. Just kidding! As far as I know, there is not yet an app for that. It does so if their is moisture detected in the hardware. This measure is the sole indicator for the employee to make their determination except in rare cases to be detailed below.  The Plaintiff alleges that Apple is aware that this external indicator cannot be relied upon with any degree to certainty to determine if the product was subjected to a spill or submersion and that things such as cold weather, humidity, sweaty palms, and other ordinary and expected everyday events can cause this external indicator to give false positive results.  It is the Plaintiff’s belief that this has been proven by independent testing. Excuse me while I cleanse my mind of the mental image of the sweaty-palmed Plaintiff waiting at the Genius Bar.

The devices also contain an Internal Liquid Submersion Indicator.  Access to this indicator requires that the product be opened, but Apple’s corporate policy dictates that this only be done on rare occasions and at corporate’s direction.  Therefore, the standard policy is to rely upon the external indicator alone without attempting to verify this diagnosis by viewing the internal indicator.  Even in cases where the internal indicator is examined, Apple does not give the customer any photographs of the status of the indicator and does not allow the customer to be present at the inspection or take their own photographs.

Once Apple has denied a warranty claim for moisture, the customer must then either pay full price for a replacement or face early termination fees from AT&T.  Because of the numerous customer complaints, Apple “quietly” began offering to sell replacement iPhone at a price of $199.00 and requiring that the old phone be surrendered beginning in May 2009.

When the Plaintiff’s first iPhone stopped operating, the Apple employee who tested it told her that it was exposed to a “significant” amount of moisture based on the external indicator alone and above her insistence that it had not.  She purchased the replacement phone and within six months, that phone malfunctioned.  When she brought the phone into an Apple store, she was told once again that the external indicator tested positive for moisture.  She did not argue as she felt it would be futile considering her prior experience.  She once again bought the replacement and surrendered the malfunctioning phone.

Ms. Gallion is asserting the following causes of action:

  • Declaratory Relief
  • Breach of Warranty Violations of the Song-Beverly Consumar Warranty Act Fraud Unfair and Deceptive Acts and Practices in Violation of the Consumers Legal Remedies Act
  • Unlawful, Fraudulent, and Unfair Business Practices in Violation of the Unfair Competition Lawbreaker Unjust Enrichment

In the Joint Case Management Conference Statement, the Plaintiff re-alleged her position as stated in her Complaint. Apple stated that its external sensors have been thoroughly tested and found to be reliable. Damage from exposure to liquids is not a defect in materials or workmanship and thus are not warrantable damaqges. Thusly,

It is beyond dispute that members of hte putative clas have in fact damaged their iPhones and iPods by liquid exposure; accordinglly, plaintiff’s putative class cannot be certified.

This part, however, is immensely entertaining,

Plaintiff’s Statement. Plaintiff originally anticipated filing a motion for class certification in approximately October 2010 (barring unforseen difficulties that would delay its preparation and filing). Defendant has recently announced, however, that is document production would be “agonizingly slow,” “frustrating,” and will cause Plaintiff’s counsel to want to “tear their hair out.” And although Defendant’s counsel have stated that many of the difficulties they forsee in responding to document requests stem from Defendant’s use of computers that are on a “non-Windows platform,” there are two basic reasons no such problem should exist. First, the parties have agreed that documents will be produced in TIFF or PDF format (which are readable by all computers) for use in Summation databases, which should resolve any issues pertaining to “non-Windows platforms.” Second, even if documents such as email were produced in native (e.g., Apple Mail) format, that would not be a problem in any event because Plaintiff’s counsel use Apple software and hardware–from their network server to their desktop and laptop computers.

In addition to seeking class certification, Plaintiff expects to file a motion for “partial” summary judgment of the aspect of Plaintiff’s claim for declaratory judgment that pertains to Defendant’s burden of establishing that it was entitled to deny coverage based on the terms of the Liquid-Damage Exclusion provisions of the Standard Warranty and the Extended Warranty.

Defendant’s Statement. As required by Rule 26, defense counsel was candid with Plaintiff’s counsel respecting the challenges of electronic discovery on a non-Windows platform. Plaintiff’s mischaracterization of the Parties’ discovery conferences does not promote the effective and efficient prosecution of this litigation.

Defendant anticipates filing a motion for summary judgment. Plaintiff’s proposed “partial summary judgment” motion seeking to alter the Parties’ burden of proof is procedurally improper and legally incorrect.

So wait… is Apple actually arguing that using its products is an obstacle for businesses such as corporations and law offices?

On August 6, 2010, the parties stipulated that a pending California case (which will be the subject of a future article) should be declared as related to this case as the claims asserted and questions of law are substantially similar. Earlier, Apple mentioned a different California case which was not mentioned at all in the Stipulation. I will look into that one as well.

In addition to her position as Assistant Editor at World of Apple, dizzle runs idrankthekoolaid, an Apple fangrl satire blog, and is an Administrator and Hostess at MyAppleSpace and their vidcast MASTv.

Legal News: McCaffrey and Wrinn v. Apple and ATT

This is a Class Action Complaint filed on June 30, 2010 in the District Court of Maryland, Case No. 1:10-cv-01776-RDB and amended on August 2, 2010 only to provide the correct corporate name for AT&T.

The subject matter of the suit is allegedly defective iPhone 4 cellular devices, and the counts include the following as against both AT&T and Apple:

  • Negligence
  • Breach of Implied Warranty for Merchantibility
  • Breach of Implied Warranty of Fitness for a Particular Purpose
  • Deceptive Trade Practices
  • Intentional Misrepresentation
  • Negligent Misrepresentation
  • Fraud by Concealment

And as against Apple only

  • Defect in Design, Manufacture, and Assembly
  • Breach of Express Warranty

The Plaintiffs are stating that they are representative of a large and as of yet unidentified class of similarly situated iPhone 4 purchasers.  They pre-ordered two iPhone 4s each on June 15, 2010.  They claim to have experienced numerous dropped calls and having been unable to return without incurring a substantial restocking fee.  They state:

In many of Apple’s text and video advertisements, individuals are shown experiencing strong reception and positive performance while holding the Apple iPhone 4 in a normal manner, including placing the user’s hand around the sides and bottom of the iPhone 4, thus making contact with the iPhone 4’s antennas.

Of note, I was surprised to see that the Amended Complaint didn’t footnote the change in Apple’s policy regarding the waiver of the restocking fee and offer of free bumpers because without that information, paragraph 13 which alleges that the Plaintiffs are unable to return the phone without that fee is now patently false.  They can.

They alleged that both AT&T and Apple had actual or constructive knowledge of the iPhone 4’s design and/or manufacturing defect(s) prior to its distribution.  They capitalized on Steve Jobs’ flippant “don’t hold it that way” email response to a customer inquiry as well as The Boy Genius Report of the alleged Genius Bar instructions to Apple employees stating not to give away bumpers or offer warranty service for this issue.  The Plaintiff’s are seeking punitive damages for willful, wanton, malicious and oppressive behaviour.  Wow.  Sometimes I think exaggeration de-sensitizes us to those things in the world that are truly evil, like genocide, not the inconvenience of dropped calls on our luxury toys.

On August 9, 2010, without explanation, Plaintiff Wrinn moved to dismiss her claims against Apple and AT&T with prejudice.

This is just one of many such cases I will be examining concerning “antenna-gate.”

In addition to her position as Assistant Editor at World of Apple, dizzle runs idrankthekoolaid, an Apple fangrl satire blog, and is an Administrator and Hostess at MyAppleSpace and their vidcast MASTv.