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USPTO Hits Apple Where It Hurts

USPTO Hits Apple Where It Hurts

Apple is smarting from the USPTO's determination that its key pinch-to-zoom patent is invalid. The decision could vaporize much of the $1.05 billion it was awarded in a jury verdict against Samsung earlier this year. That may be just the tip of the iceberg, though. The USPTO finding could cut off the flow of licensing revenue Apple has been receiving from other companies for use of the now-invalid patent.

By Erika Morphy E-Commerce Times ECT News Network
12/20/12 3:42 PM PT

The U.S. Patent and Trademark Office on Wednesday rejected all 21 claims in Apple's "pinch-to-zoom" patent in a preliminary ruling after an ex parte re-examination of the patent.

The USPTO ruling is a significant blow to Apple, as the patent was among those found to have been infringed by Samsung in a case that went to trial this summer. The jury awarded Apple more than US$1 billion in damages in that case, but Judge Lucy Koh subsequently denied Apple's request to ban the sale of certain Samsung products, and she has not yet approved the damages amount.

Apple could appeal the USPTO decision, but if it loses, the reversal could limit the damages Apple would be awarded in the suit.

A Losing Streak

This invalidation comes at an unfortunate time for Apple, which has been on the losing end of several patent-related initiatives. It recently lost a case brought by MobileMedia Ideas, which alleged that Apple misappropriated its technology for mobile devices.

Last month, a court dismissed Apple's lawsuit against Motorola Mobility for abusing standard-essential patents.

On the other hand, an International Trade Commission judge ruled just this week that Apple has not violated Google's Motorola Mobility patent for a touchscreen sensor, with the judge finding that the patent was invalid.

Still, the losses are adding up at a time when Apple's stock is perceived to be weakened. What's more, this setback strikes at the heart of one of Apple's great patent related victories -- its win over arch-enemy Samsung in the U.S.

A Bigger Hit

The USPTO's decision will probably reduce the damages claim against Samsung, said Peter S. Vogel, a partner with Gardere Wynne Sewell.

However, Apple's exposure is much bigger than the Samsung trial, he told the E-Commerce Times.

"What we don't know -- and that is not public information -- is what companies are licensing the [invalidated] patent and paying fees to Apple," he said.

Probably those companies wouldn't have a case if they sought to have the money they paid to Apple returned, he speculated, "but they certainly wouldn't have to pay fees to Apple going forward."

Given Apple's vigilant approach to patent infringement, said Vogel, it is likely there are many companies out there that are licensing this patent.


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