Thursday, January 30th 2020

The Case is Patent: Apple, Broadcom Ordered to Pay $1.1 billion to CalTech

There is a lot to say regarding patent applications and their defense, and the devious ways these can be used as a way to both stifle innovation, competition, and to leech other companies' funds with what is usually described as "patent troll" behavior. Being a seat of technological innovation, The California Institute of Technology (CalTech) registers patents as results of their attachés' work - some of these see the light of day as actual products, but more often than not, the patent rights are used as a way for the institute to receive funds from those that would license their intellectual property.

After entering a legal battle with Apple and Broadcom back in 2016, CalTech has now had its accusation of patent infringement against both companies come to a close, with the jury deciding in favor of the university. The accusation was of both companies deploying WiFi chips which were based on Caltech's patent designs - WiFi chips that were then shipped within millions of iPhones, iPads and MacBooks. As a result, both Apple and Broadcom were ordered to pay a total of $1.1 billion in compensation, with Apple taking the brunt of the decision ($837.8 million) and Broadcom coming in with a thinner slice at $270.2.
Both Apple and Broadcom have come forward saying they intend to appeal against the decision, with Apple using the tactic of shirking off responsibility. According to the company, they are "an indirect downstream party" to the patent-infringing WiFi modules, which means Apple believes they have no responsibility as to any patent infringements that were included in the design of the chips it ordered from Broadcom. Stock valuation of both Apple and Broadcom declined after the jury's decision was made public.

As for CalTech, the scholl said in a statement that they are "(...) pleased the jury found that Apple and Broadcom infringed Caltech patents. As a non-profit institution of higher education, Caltech is committed to protecting its intellectual property in furtherance of its mission to expand human knowledge and benefit society through research integrated with education." Source: TechSpot
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36 Comments on The Case is Patent: Apple, Broadcom Ordered to Pay $1.1 billion to CalTech

#1
ZoneDymo
"As a non-profit institution of higher education"

yeah....sure they are
Posted on Reply
#2
Unregistered
ZoneDymo
"As a non-profit institution of higher education"

yeah....sure they are
:roll:

Now the billion dollar + "non-profit institution of higher education"
Posted on Edit | Reply
#3
gamefoo21
ZoneDymo
"As a non-profit institution of higher education"

yeah....sure they are
Well it's a donation that will go to loweri...

Who am I kidding, watch tuition go up. LoL
Posted on Reply
#4
Valantar
I would applaud this if it didn't happen within the massively corrupt US college system. Research institutions in general get far too little in return for their research, and most billion-dollar companies today wouldn't exist if it weren't for the contributions of external researchers. Heck, even in the US chances are the research in question was taxpayer funded. Oh well. Apple can afford to pay.
Posted on Reply
#5
Vya Domus
US legal systems and juries regarding patents are a real cesspool. Nothing to see here.
Posted on Reply
#6
xorbe
A reminder that universities are business first, education second.
Posted on Reply
#7
R-T-B
gamefoo21
Well it's a donation that will go to loweri...

Who am I kidding, watch tuition go up. LoL
Knowing my old campus at evergreen, when they get a large sum of money, tuition never comes up in discussion. Instead, they build useless buildings no one asked for.

One of the more recent ones is shaped like a curved concrete cylinder, and is refered to by students as "the UFO." I have no idea what they do with it. I used to joke they enriched uranium there.

xorbe
A reminder that universities are business first, education second.
Most are. None should be.
Posted on Reply
#8
Easy Rhino
Linux Advocate
Apple should not have to pay anything. Broadcom is fully responsible. It is up to them to manage the legality of the products they sell. Seems like Apple is an easy target because they have so much money. I am not saying Apple has never participated in shady tactics but this seems like a railroad of Apple.
Posted on Reply
#9
DeathtoGnomes
Easy Rhino
Apple should not have to pay anything. Broadcom is fully responsible. It is up to them to manage the legality of the products they sell. Seems like Apple is an easy target because they have so much money. I am not saying Apple has never participated in shady tactics but this seems like a railroad of Apple.
Apple should have known better going into a deal like that, they are still culpable to a lesser extent.
Posted on Reply
#10
Easy Rhino
Linux Advocate
DeathtoGnomes
Apple should have known better going into a deal like that, they are still culpable to a lesser extent.
How should they have known better? Unless Broadcom told Apple that the patents were dubious then Apple does not need to know.
Posted on Reply
#11
Valantar
Isn't Apple pretty much Broadcom's only large scale WiFi customer at this point? Given that Apple uses them exclusively and buys their chipset in the tens if not hundreds of millions each year I would guess they are quite intimately involved with their development.
Posted on Reply
#12
notb
Very weird thread with very worrying comments.
Is this community so much against IP that even Apple gets some sympathy this time? :p

"Non-profit" does NOT mean an institution can't sell stuff.

The $1.1B figure looks silly and likely will get lower over the next court case.
But universities are research facilities as well. They have to protect their work.
Posted on Reply
#13
cdawall
where the hell are my stars
DeathtoGnomes
Apple should have known better going into a deal like that, they are still culpable to a lesser extent.
I do not believe apple gets a list of possible patent infringements when they order a chip to spec.
Posted on Reply
#14
notb
Easy Rhino
Apple should not have to pay anything. Broadcom is fully responsible. It is up to them to manage the legality of the products they sell. Seems like Apple is an easy target because they have so much money. I am not saying Apple has never participated in shady tactics but this seems like a railroad of Apple.
It's a bit more complex than that.

Patent infringement cases are not about companies earning undeserved profit. It's about patent owner losing money because he isn't being paid for his work.
The $1.1B is not a fine (you pay that to the government). It's a compensation for lost profit.

Here's an example of a situation this is designed to prevent.
Company "A" wants to buy a product that uses an IP from company "C".
Suppliers have to pay a fee X - per item made - to the license provider "C".
So I'm a company "B". I decide to make a product that uses "C"'s work, but I don't pay for the license.
I could still sell this product for as much as everyone else and make the whole stolen X, but that doesn't give me any competitive advantage.
Instead, I make my product cheaper by 0.75 * X.
As a result, I'm much cheaper than other suppliers, so I win the contract.
I still make more than every other supplier would (by 0.25 * X).
Buyer "A" earns additional 0.75 * X (compared to if he bought from a supplier that paid for IP use).

If "C" goes to court and wins this case, they should be given the whole X. "C"'s best interest has a priority.
And the real threat (going back to preventing things) is: what if "B" decided not to take any of the stolen value? They could sell a product for X less than everyone else. "A" would earn the whole X. And if "C" was only eligible to what "B" took for themselves... the whole IP idea would collapse.

How "A" and "B" settle this afterwards is of less improtance. Of course "A" can sue "B" and potentially get the 0.75*X back.
cdawall
I do not believe apple gets a list of possible patent infringements when they order a chip to spec.
Apple, being a major and serious company, should check if the product they buy is "clean". And in the next court case they'll try to prove that they did everything possible - we'll see if the court agrees.
Expecting that a supplier will voluntarily give them such information is like expecting he also gives a list of possible production faults and design mistakes.

And now the inevitable car analogy (which works for any other material product):
If you buy a stolen car and you're "cought", the car will be returned to the rightful owner.
You, as a buyer, are obliged to check if the seller has the right to sell an item (he is an owner or an agent).
If you can't prove you checked ownership, you may be accused of fencing.
If the court decides you bought a stolen car inadvertently (you did some checks, you used sources available to a private buyer etc), you're off the hook for fencing, but you still lose the car, i.e. a lot of money (possibly way more than the thief).

And now when the material ownership becomes even more strict than IP stuff.
If the rightful owner can't be found (or is dead), you still lose the car.
Posted on Reply
#15
R0H1T
cdawall
I do not believe apple gets a list of possible patent infringements when they order a chip to spec.
Pretty sure when signing such massive deals, Apple does know what they are getting into. Any competent legal department will take a look at something like that & knowing Apple, especially their dubious patent litigation history, they would've looked into it.

Valantar
I would applaud this if it didn't happen within the massively corrupt US college system.
You could apply that to the 3 branches of govt as well, across the globe in fact. As I've repeatedly said ~ money, power, influence have corrupted everything around the world & the US is no better in that regard.
Posted on Reply
#16
Xaled
Nice to see universities finally start to charge for what they've been giving for free for almost 300 years; feeding the capital with science and qualified workforce, raping students and promoting homosexuality.
Posted on Reply
#17
TheLostSwede
Valantar
Isn't Apple pretty much Broadcom's only large scale WiFi customer at this point? Given that Apple uses them exclusively and buys their chipset in the tens if not hundreds of millions each year I would guess they are quite intimately involved with their development.
On the client side, maybe. But Broadcom is the major WiFi router/AP chip player. If say there's 2 to 1 ratio of Broadcom based routers/APs to all other brands combined.
Posted on Reply
#18
lexluthermiester
I'm glad to see things have finally worked out the correct way for once. This proves that Apple is less than trustworthy and has been that way for a long time. And because it's a jury trial, an appeal will be MUCH more difficult, effectively a waste of time. Jury verdicts are rarely over-ruled by an appellate court. Whether they like it or not, Apple and Broadcom are going to have to pay for their dishonesty.
Posted on Reply
#19
Valantar
R0H1T
Pretty sure when signing such massive deals, Apple does know what they are getting into. Any competent legal department will take a look at something like that & knowing Apple, especially their dubious patent litigation history, they would've looked into it.

You could apply that to the 3 branches of govt as well, across the globe in fact. As I've repeatedly said ~ money, power, influence have corrupted everything around the world & the US is no better in that regard.
I don't entirely disagree with you, but it would sure be nice if you didn't bungle your quotations there. Appreciate it if you were to fix that.
Posted on Reply
#20
R-T-B
lexluthermiester
I'm glad to see things have finally worked out the correct way for once. This proves that Apple is less than trustworthy and has been that way for a long time. And because it's a jury trial, an appeal will be MUCH more difficult, effectively a waste of time. Jury verdicts are rarely over-ruled by an appellate court. Whether they like it or not, Apple and Broadcom are going to have to pay for their dishonesty.
Apple may have a point here in an appeal, but Broadcom is screwed.

Apple merely licensed the infringing product. How were they to know?
Posted on Reply
#21
lexluthermiester
R-T-B
Apple may have a point here in an appeal
They don't have a prayer because...
R-T-B
Apple merely licensed the infringing product. How were they to know?
That's the point and why the jury slammed them, they knew!
Posted on Reply
#22
kapone32
lexluthermiester
They don't have a prayer because...

That's the point and why the jury slammed them, they knew!
Unfortunately the way I see Apple will be happy to spend more than 1 billion dollars to appeal this case. They have made so many infringements it is not funny.
Posted on Reply
#23
DeathtoGnomes
Easy Rhino
How should they have known better? Unless Broadcom told Apple that the patents were dubious then Apple does not need to know.
You are assuming they never asked. I am assuming Apple is smart enough to ask.

cdawall
I do not believe apple gets a list of possible patent infringements when they order a chip to spec.
blindly ordering like they did is asking for trouble and they got it.
Posted on Reply
#24
R0H1T
Valantar
but it would sure be nice if you didn't bungle your quotations there. Appreciate it if you were to fix that.
Not sure why your name is showing in the first quote, pretty sure it was the other poster when I first submitted the reply.
Posted on Reply
#25
Vya Domus
kapone32
They have made so many infringements it is not funny.
But the thing is that everyone does it, it's simply impossible to make products of that complexity and scale these days without infringing on a plethora of patents. With everything you can find, if you search deep enough will find something, it's unavoidable. The only real thing that matters is who will find it and whether or not they figure out how they can use it to extort money from some entity.

The manner in which these patents are created and used is fundamentally flawed, there is no filter. Of course someone should be able to protect their designs to an extent but not like this, it's a straight up broken system.

For instance one of the many examples of a mind boggling patent shitshow is how Magnavox acquired a patent to "video game art " (you heard that right) and used it to make millions of dollars over the span of dozen of years from all sorts of companies.
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