Appeals court invalidates Smartflash patents that Apple was ordered to pay $533M for infringing
Massive verdict would have been largest ever for a non-practicing entity. — It looked like Smartflash LLC had Apple right where it wanted it after a jury awarded the patent-holding company $533 million …
Context & Ripple Effects
This closes a two-year arc that began when a jury told Apple to pay $532.9M to Smartflash LLC over iTunes features — a sum that would have been the largest ever for a non-practicing entity. A judge later voided the award and ordered a new damages trial, and Smartflash kept pressure on by filing a second suit over the same patents in the iPhone 6/6 Plus and iPad Air 2.
The invalidation ends both threads at once: with the patents themselves dead, there is nothing left to license or litigate. The contrast with Apple's other NPE fight is stark — against VirnetX, a USPTO invalidation did not stop a half-billion-dollar judgment, and a federal judge later denied Apple's appeal of the $502.8M VirnetX verdict. Validity challenges cut both ways.
First-order effects
- Apple owes nothing on the $533M verdict, and Smartflash's second suit over the iPhone 6/6 Plus and iPad Air 2 loses its foundation because it rests on the same now-invalidated patents.
Second-order effects
- Smartflash, a licensing-only entity whose sole assets were these patents, effectively loses its business model — while other NPEs watching the case must price in appellate invalidation as a real risk to even record-setting jury awards.
Third-order effects
- If the pattern holds, big-ticket NPE cases will be decided less by juries than by whoever outlasts the parallel validity track — pushing defendants like Apple to fight every verdict through post-trial channels rather than settle, and leaving outcomes divergent case by case, as the VirnetX loss alongside this win shows.
The trend: Patent assertions by non-practicing entities are increasingly decided by post-verdict validity challenges rather than jury awards, making headline damages numbers provisional until the appeals courts weigh in.