Apple told by court to pay half a billion dollars to a ‘patent troll’, here’s why

Apple

Apple has been ordered to pay $502 million to Optis—a patent-holding company often labeled a “patent troll”. A UK court ruled that Apple must pay for the global use of standard-essential 4G patents found in both iPhones and cellular iPads, as per a report by 9to5Mac.

Optis, a patent assertion entity (PAE), doesn’t invent or manufacture anything. Instead, it acquires patent portfolios and monetises them by suing companies it accuses of infringement. In this case, Optis acquired a set of standards-essential patents related to LTE technology—ones that are critical for building any modern 4G device, according to the report.

Under global industry norms, such patents are to be licensed on FRAND terms—Fair, Reasonable, and Non-Discriminatory. But “FRAND” has no universally accepted legal definition, which routinely leads to disputes like this one. Optis claimed that a previous UK judgment awarding it $56 million wasn’t enough, since that sum applied only to UK sales. Instead, it argued it was entitled to a global licensing fee—an argument the court ultimately upheld.

Apple’s legal team had previously floated the idea that it might consider withdrawing the iPhone from sale in the UK if a global licensing fee was imposed. The judge, however, did not take the suggestion seriously, stated the report.

The UK Court of Appeal ruled that Apple must pay the $502 million lump sum to cover use of the patents from 2013 through 2027. This doesn’t include interest. Apple responded, stating it is “disappointed by this decision and plans to appeal.”