Top 10 Epic Legal Battles That Cost Apple a Fortune
Apple has found itself entwined in a number of legal battles over the years. While some were meritless from the get-go, lodged by so-called "patent only" firms merely out looking for their own slice of the big Apple — others ultimately rendered sweet justice in the company’s favor. Of course, we also can’t forget about the many legal battles Apple has fought, lost, and paid for, handsomely, and in some cases, perpetually, to this very day. Use the Right Arrow to Learn About 10 Epic Legal Battles That Cost Apple a Fortune.
10 Employees of Apple vs. Apple
Filed back in 2011 by four San Diego, California-based Apple Store employees, this case was conceived around the employee’s allegations of “unfair treatment” by Apple management, while the company’s policies, according to court documents, strictly “forbade them from so much as discussing their working conditions,” among other things.
Relentless in their pursuit of justice, the four employees were ultimately granted class action status on their case back in 2014, when an estimated 21,000+ additional Apple employees — past and present — joined as co-plaintiffs.
Interestingly, after years of back and forth litigation, the jury came back saying Apple had not only “illegally denied retail staff meal and rest breaks,” but in some instances, the company failed to provide outgoing employees with their due compensation in a complete and/or timely manner. In the end, after all court, attorney, and associated fees were accounted for, each employee listed as a co-plaintiff in the suit received a whopping $95 check.
9 Apple vs. Multimedia Ideas
Between 2010 and 2016, Apple had been silently waging legal warfare against a small, patent-only firm named Multimedia Ideas. The firm, a joint holding of Sony and NOKIA, was originally seeking $18 million from Apple for its alleged “willful infringement” on the firm’s exclusive ringtone patents.
Though Multimedia Ideas hasn’t a single product to its name, the firm holds over a dozen technical patents including one, in particular, which was determined by the court to infringe on iPhone’s ability to silence an incoming call without the caller’s knowledge.
As a result, though the patent-only firm sought a much more substantial sum of $18 million, the Delaware judge presiding over the case ultimately made Apple Pay a paltry $3 million.
8 Dynamic Advances vs. Apple
Back in 2014, Apple was sued by yet another “patent troll” company, Dynamic Advances. At the time, the firm alleged that Cupertino’s voice-driven personal assistant, Siri, violated one of its patents which had been licensed by two professors affiliated with the Rensselaer Polytechnic Institute.
The case was ultimately settled back in April of 2016, however, when Apple agreed with the court’s judgment to pay Dynamic Advances’ parent company, Marathon Patent Group, a total of $24 million — including $5 million up-front, and another $19.9 million ongoing — in exchange for an exclusive license on the disputed patent.
7 VirnetX vs. Apple
This case is one of Apple’s longest-running patent battles, stemming from VirnetX’s 2012 allegations that Apple willfully infringed on four patents related to FaceTime, iMessage, and other Apple-branded VoIP protocols.
Though VirnetX is yet another patent-only entity bold enough to bring their complaints against Apple to court, it’s worth noting that over the years it’s been going through the court system, Apple has been slapped with multiple judgments for within the ballpark of $500 million, plus or minus — which have of course been contested and appealed by the tech titan at every twist and turn.
The last update from this case, which is still ongoing at this point, came back in October of last year when a federal judge ordered Apple to pay nearly $440 million to VirnetX..
Naturally, Apple vowed to appeal the judgment — just as it’s done the last three times it was determined to have “willfully infringed” VirnetX's patents. Only time will tell how, or to what extent, Apple is "culpable," of course; but even at its current rate, the company is spending a fortune in legal fees just defending itself.
6 Amazon vs. Apple (featuring the U.S. Department of Justice)
Back in 2013, Amazon brought a civil anti-trust lawsuit against Apple and a myriad of e-book publishers, including Penguin and HarperCollins, claiming that the iBooks publisher “conspired to inflate” the price of digital e-books (iBooks) in order to “weaken Amazon’s grip on the market.”
“Apple chose to join forces with the publisher defendants to raise e-book prices and equipped them with the means to do so,” the court’s decision reads, adding that “Without Apple’s orchestration of this conspiracy, it would not have succeeded as it did.”
Interestingly, while the publishers named in court documents ultimately reached out-of-court settlements with the U.S Department of Justice (DOJ) — who intervened in the highly-publicized case — Apple continued to fight the charges, appealing them multiple times until a District Court judge confirmed the DOJ’s decision to levy a whopping $450 million fine against it in 2014.
Fortunately, those who purchased eligible Kindle e-books between April, 2010 and May, 2012 have likely received their refund, as determined by the case, already — but if you think you qualify and have not received a refund yet, feel free to check if you’re eligible on Amazon’s website anytime until April 20, 2018.
5 University of Wisconsin vs. Apple
Back in October, 2015, it was determined that Apple infringed on a microprocessor patent belonging to the University of Wisconsin’s Alumni Research Foundation, which specifically had to do with a microCPU design Apple allegedly used in the fabrication of certain A6, A7 and A8 processors.
While the judge initially determined Apple could be liable for as much as $862 million in “punitive damages,” after careful consideration of the evidence presented, His Majesty ultimately ruled that Apple only has to pay $234 million — plus an additional $272 million in “damages for infringing WARF’s microprocessor technology” — bringing the total amount levied against the tech giant to a hefty $506 million.
4 Smartflash, LLC. vs. Apple
Originally filed back in May, 2013, Smartflash lodged a multi-pronged complaint against Apple, saying that the tech giant’s digital music management software, iTunes, incorporated three of the firm’s patented ideas — specifically covering digital rights management, data storage, and mobile payment systems — allegations which Apple vehemently denied all along.
In February of 2015, meanwhile, a federal judge appointed to the Eastern Texas District Court ultimately handed down a judgment ordering Apple to pay $532.9 million to the patent-licensing only firm. And while that sum is in itself substantial, not only was Smartflash initially seeking as much as $852 in damages, but, as it usually does in these cases, Apple has already appealed the decision while calling for sweeping reform to the patent system.
3 Apple vs. Qualcomm & Qualcomm vs. Apple
If you’ve been following us in recent months, you’re likely no stranger to Apple’s currently ongoing, billion-dollar legal battle with its former iPhone modem supplier, Qualcomm.
Filed back in January of 2017, the initial salvo in this highly-publicized case was a U.S. Federal Trade Commission (FTC) injunction, filed with Apple’s joint blessing, accusing Qualcomm of what was described as “monopolistic practices” — in that the company obtained an unfair grip on the chip market by forcing Apple to use its modems, exclusively.
Since the initial claim was filed, we’ve covered an insufferable number of breaking news updates relevant to the case, including a whole new round of subsequent cases filed in various jurisdictions around the world, which manifested as a result of the original complaint.
While Apple has thus far remained safe from judgment in any of the pending, ongoing litigation, it’s worth noting that the company has nevertheless incurred a substantial legal expense fighting the battle. How much? At this point, it’s really tough to say — especially since the fight is still unfolding all around the world — but it’s estimated to have cost Apple as much as $1 billion thus far, according to an anecdotally titled exposé published by Bloomberg.
Qualcomm, meanwhile, has taken a magnificent hit of its own.. As of February, 2018, not only is the chip maker liable for billions of dollars in international fines and penalties levied against it, but its profits have plummeted by more than 40 percent, according to some reports.
2 NOKIA vs. Apple
Towards the end of 2016, Apple found itself entangled in yet another, high-profile patent infringement lawsuit — this time with Finnish phone maker, NOKIA, who charged that Apple infringed on at least two of its patented technologies, via features incorporated into iPhone and iPad without proper license.
Interestingly, despite its typical array of courtroom melodrama, this case was among Apple’s shortest; from a time standpoint, the feud lasted only six short months before the companies reached a resolution around May of last year.
And though there was a lot of back-and-forth banter along the way — with Apple, at one point, even pulling NOKIA’s line of Withing’s Home products from its shelves — the companies ultimately settled on amiable terms. Apple, for its part, was ordered to pay NOKIA a staggering $2 billion for infringing on its patented technology — but, at the same time, the companies came together and forged a new agreement which will see them cooperate on a number of projects moving forward.
1 Apple vs. Samsung
Often referred to as the “Smartphone Patent Wars,” this unprecedented dispute between Apple and Samsung kicked off in the spring of 2011, when Apple lodged its first in what’s become a laundry list of patent and design complaints against the South Korean Galaxy maker.
In the years since, this case has evolved to cover a wide range of smaller disputes, as well as counterclaims from both companies, in various levels of the court system — including the U.S. Supreme Court, who intervened at Samsung’s eleventh-hour request and handed down their judgment in June, 2017.
Before that, however, Samsung was ordered in 2012 to pay Apple as much as $1 billion for what the court determined was infringement on a number of iPhone patents, including several covering design, and Apple’s hallmark “pinch-to-zoom” feature.
Meanwhile, in subsequent phases of the trial, the amount Samsung owes Apple has been slashed, repeatedly. The last we heard in this case, Samsung was liable for around $120 million.
Of course, while Apple technically didn’t lose in the end, at the least, this case serves as a stellar example of how costly and time consuming it can be to pursue patent litigation. According to estimates, the patent battle in its entirety has cost upwards of $40 billion to fight thus far — and, at this point, the fight is still ongoing — so we’ll just have to see how it all plays out!