Apple stung for $308m in battle over patent used in FairPlay DRM software

'Cases like this... stifle innovation and ultimately harm consumers,' says iGiant

A jury in the Eastern District of Texas has ruled that Apple infringed upon a patent held by Personalized Media Communications (PMC) LLC, ordering it to pay over $308 million in damages.

The patent in question pertains to US patent No. 8,191,091, named "Signal processing apparatus and methods". First filed in 1981 and eventually granted in 2012, the patent describes how an integrated system can broadcast content (such as audio, video, software, or text) to multiple receivers through an encrypted channel. These transmissions can be customised to each individual recipient, showing things like personalised advertising or relevant content.

In 2015, Personalized Media Communications (PMC) filed suit against Apple, arguing its FairPlay DRM software infringed upon the approach described in this patent, and was thus owed royalties and damages.

In its unsuccessful defence, Apple argued PMC's patent was inherently invalid, claiming it merely described in abstract terms how an encrypted signal is transmitted and decoded, rather than detailing specific approaches and technologies. Apple also argued against a "prior art" defence, noting that the technologies required to encrypt and decrypt data had existed before the initial 1981 filing.

These arguments were rejected by the court, which noted the patent describes a series of steps in which this decryption process can take place.

Separately, in 2020 Apple successfully challenged the patent at the Patent Trials and Appeals court, which ruled several of its claims were unpatentable. This was overturned on appeal [PDF], with a federal court ruling that prior art merely described analog-to-digital signals, whereas this described a purely digital environment.

Founded in 1995, PMC's patent portfolio encompasses a handful of creations from the company's founder, John Christopher Harvey. PMC has monetised these through a mixture of licensing and aggressive litigation, with its webpage claiming Samsung, Cisco, and LG as licensees, and legal battles with Netflix, Google, and Amazon ongoing.

Per the verdict, Apple has been ordered to pay damages as a running royalty. As much of the documentation surrounding the case has been sealed, it's unclear how this will be structured.

The Register has asked Apple to comment. In a statement provided to legal newswire Law360, the company said it was "disappointed" with the verdict and intends to appeal. "Cases like this, brought by companies that don't make or sell any products, stifle innovation and ultimately harm consumers."

PMC has also been asked to comment.

The Eastern District of Texas has long been a preferred jurisdiction for intellectual property disputes over the perception that it is a "friendly" jurisdiction for plaintiffs, delivering positive rulings and hefty judgements.

This reputation developed in the 1990s, according to a 2011 article in the Science and Technology Law Review, when an ailing Texas Instruments began monetising its patent portfolio, choosing to file cases in the town of Marshall. With few criminal cases being held (largely due to the fact that Marshall, population 23,000, lacks an FBI office or US attorney), Marshall's federal court allowed for a level of expediency unavailable elsewhere.

Although the influx of patent suits has been beneficial for the local community, as described by a Texas Monthly feature, it's proven less popular elsewhere, with the late Supreme Court jurist Antonin Scalia describing Marshall as a "renegade jurisdiction". A 2017 Bloomberg feature was similarly scathing. ®