Judge tosses jury’s $533 million patent verdict against Apple, orders new trial

A $533 million jury verdict that would have been the largest ever for a "patent assertion entity" has been struck down four months after a jury granted it. US District Judge Rodney Gilstrap, who oversaw the case against Apple, has ruled that the damages verdict must be thrown out because of a faulty instruction to the jury. He has ordered a new trial to be held solely on the issue of damages. Judge Gilstrap said the jury was instructed about the "entire market value rule" of patent damages, even though Smartflash didn't apply that model in its case. "[T]he confusion created by the instruction noted above warrants a new trial on damages in this case," Judge Gilstrap wrote in the order. "The Court is persuaded, in the clarity of post-trial hindsight, that such instruction may have created a skewed damages horizon for the jury." If upheld, verdict would be largest yet for a patent assertion company. The judge also expressed concern about a consumer survey Smartflash used in its damage model but wrote, "At this time, the Court does not comment on the sufficiency of Smartflash's survey questions."

In a separate order, Judge Gilstrap ruled that Apple's infringement isn't willful, despite the jury's finding otherwise. During trial, Smartflash lawyers grilled Apple Senior Director Augustin Farrugia, who met with the Smartflash inventor back in 2000 before he worked at Apple. "[T]he Court finds nothing in his testimony which even approximates the clear and convincing evidence necessary to establish willfulness," Judge Gilstrap wrote.