Apple Must Pay Cal Tech $838 Million for Patent Dispute

By Chand Bellur

March 10, 2020 at 7:08 p.m. PDT

  • Apple uses Broadcom wireless chips, which infringe on three California Institute of Technology patents.
  • Cal Tech sued Apple and Broadcom for patent violations, resulting in a $1.1 billion verdict.
  • Apple’s attempt to appeal one of the three patents was rejected by the Federal Circuit.

Apple Must Pay Cal Tech $838 Million for Patent Infringement

Technology is a competitive industry, and its players play to win. Sometimes this means outright intellectual property theft. Stealing from competitors often goes unchallenged. Apple Music and most other music subscription services slavishly aped Spotify, however, the much smaller enterprise can’t fight back.

Not all underdogs lose out to Apple. Cal Tech, home to some of the brightest minds on the planet, recently won a jury verdict against one of the largest corporations on the planet. Apple must pay the university $838 million for infringing on three WiFi-related patents.

Broadcom, maker of the wireless chips, must also pay $270 million to Cal Tech. The wireless chip maker used Cal Tech’s technology without permission. The royalty-free WiFi modules ended up in Apple products, which also constitutes patent infringement. Apple must pay a much greater settlement, as the tech giant realized greater profits than Broadcom.

Cal Tech Patents Essential for WiFi

Apple attempted to beat patent violation allegations by claiming the technology was obvious. When presented with the facts, a jury disagreed.

Cal Tech’s patents deal with some of the finer details of wireless data transmissions. The patents cover how wireless data speeds can be throttled based on battery power, processing speed and even heat. Data encryption, key to Apple’s privacy promise, is also part of Cal Tech’s intellectual property.

One of the actual patents, dealing with increasing data transmission rates, is very detailed and specific. It’s hard to believe that such specific innovation could be obvious. Cal Tech isn’t trying to patent WiFi networks in a generic way. They provided very specific technology for increasing WiFi speeds, which Broadcom used without negotiating or paying royalties.

Apple is considered liable, because they knowingly used technology belonging to Cal Tech. The patent verdict was based on a hypothetical negotiated royalty, beginning in 2010.

The verdict is a huge blow to Apple, which is no longer the largest corporation in the world. Stock buybacks have inflated the company in one respect, however, patent infringement costs will take an even bigger toll on a company plagued with coronavirus production kinks and another major settlement over iPhone throttling.

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