FaceTime, Apple's video-chat service, is costing the company a lot of money.
James Martin/CNET
Those monthly video chats with your mother on her iPad are starting to get expensive.
Only Apple is the one that has to pay.
The Cupertino, Califoia, tech giant was dealt a legal blow on Wednesday when a Texas jury awarded patent-holding company VietX a mammoth $625.6 million award after ruling that Apple illegally used VietX's technology in its popular FaceTime video-chat service and virtual private networks.
"Our employees independently designed this technology over many years, and we received patents to protect this intellectual property," an Apple spokeswoman said in an email statement. "Cases like this simply reinforce the desperate need for patent reform."
It's just the latest legal squabble involving Apple, which isn't a stranger to patent infringement cases itself. But while Apple has sued to protect what it believes are the unique features of its products, companies like VietX don't make products and primarily make their money through lawsuits, and are derisively known as patent trolls.
There's wide agreement that the US patent system is sorely in need of changes. The White House, Congress and several state attoeys general have fought to curb the mountain of patent lawsuits clogging the judiciary system. The problem is especially bad in the tech industry, where both tech giants and patent trolls have traded barbs in suits for years. Many govement agencies see this rash of patent suits as hurting innovation, especially for small companies that don't have the money to fight drawn-out patent suits.
There have been a lot of efforts to cut down on patent suits, including Congress's 2011 America Invents Act, the first reform of patent laws in decades. Also, in 2014 the Supreme Court struck down a software patent in the case Alice Corp. v. CLS Bank. Since that ruling, many lower courts have thrown out other software patents, making it harder for patent trolls to go after bigger companies.
Still, the number of cases by patent trolls went up last year, to 3,604 from 2,891 in 2014, according to a January report by patent-services company RPX. Still, the number was down from 3,733 in 2013. The most popular location by far to file these suits has been the Easte District of Texas, which has long been considered the most plaintiff-friendly place for this kind of litigation. The Apple award on Wednesday was in the same district.
The Apple suit, meanwhile, is a do-over of a 2012 jury trial between the two companies, in which VietX won $368 million. An appeals court overtued the decision and ordered a new trial. VietX has also sued Microsoft, Cisco, Avaya and others over its patent portfolio.
VietX shares jumped 61 percent Thursday on the Apple decision, since the damages were worth more than the small company. Apple shares were flat.
The huge Apple award may mean the govement has a long way to go before it kills off, or at least injures, patent trolls.
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