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Original 3G iPad owners get eligibility claim forms for proposed settlement
Yesterday, those who had ordered an original 3G-enabled iPad on or before June 7, 2010, received an email outlining the details of a proposed settlement in a class action lawsuit. As you may recall, AT&T offered unlimited iPad data plans when the tablet first appeared in 2010, but quickly pulled those plans. Some customers may have purchased iPads based on the "come-on" of unlimited data at a set rate, warranting the damages that have been set by the courts. According to the email, those who are members of the class are eligible for a one-time US$40 payment from Apple as well as "other benefits from AT&T," which amounts to a discounted data plan. The claim can be submitted online by using an embedded link and a special claim number assigned to each member of the class, and the claim must be made by February 3, 2014. If you purchased a 3G iPad in those early days and didn't receive a claim form, you can request one by calling a toll-free phone number listed on the form. Many thanks to TUAW reader Dan M. for forwarding his copy of the settlement email to us (click the press release button below to read). Show full PR text $40 payment from Apple and discounted data benefit plan from AT&T under class action settlements Click here or go to www.3Gdataplansettlement.com/claim to file your claim using your Personal Claim Number Your Personal Claim Number is If you purchased more than one eligible iPad 3G, you will receive a separate e-mail with a separate Personal Claim Number for each iPad. You must submit a separate claim form for each iPad using the separate Personal Claim Number. If you purchased or ordered an iPad with WiFi + 3G on or before June 7, 2010, you could be entitled to $40 from Apple, and other benefits from AT&T, under class action settlements The Court authorized this notice. This is not a solicitation from a lawyer. You are not being sued. This notice may affect your legal rights. Please read it carefully. You may be entitled to a $40 payment from Apple, and other benefits from AT&T, under two settlements that have been reached in class action lawsuits titled In re Apple and AT&T iPad Unlimited Data Plan Litigation. The United States District Court for the Northern District of California authorized this notice. The Court will have a hearing to consider whether to approve the settlements so that the benefits may be provided. WHO'S AFFECTED? You're an "Apple Class Member" if you are a United States resident who purchased or ordered an iPad 3G in the United States on or before June 7, 2010. You're an "AT&T Subclass Member" if you also did not sign up for any AT&T data plan for that iPad at any time. WHAT'S THIS CASE ABOUT? The lawsuits claimed that iPad 3G purchasers were not provided with access to an "unlimited" data plan in the manner originally advertised by Apple and AT&T. Apple and AT&T deny all allegations and are entering into these settlements to avoid burdensome and costly litigation. The settlements are not an admission of wrongdoing. WHAT CAN YOU GET FROM THE SETTLEMENTS? Apple will provide a $40 payment to all Apple Class Members who submit a valid Claim Form. AT&T will provide a "Data Plan Benefit" to AT&T Subclass Members who did not sign up for an AT&T 3G data plan for their iPad at any time and who submit a valid Claim Form. The Data Plan Benefit provides an AT&T 5GB iPad data plan for $30/month for up to one year, which is a $20/month discount from the current monthly rate; if the monthly rate of the 5GB iPad data plan changes, a discount of $20/month will still be provided. HOW DO YOU RECEIVE BENEFITS? You must submit a valid Claim Form by February 3, 2014. The Claim Form will require you to affirm that the ability to switch in and out of the "unlimited" data plan was a factor in your decision to purchase an iPad 3G. You can submit a Claim Form online by following this link and using the Personal Claim Number above. You may also request a Claim Form by calling 1-800-248-1504. You may submit claims for the Cash Benefit, the Data Plan Benefit, or both. Only eligible persons will receive benefits. IMPORTANT DEADLINES: You must submit your Claim Form on or before February 3, 2014, or you will lose your right to obtain these benefits. If you wish to receive a reminder notice before the deadline, click here or go to www.3Gdataplansettlement.com/Subscribe. WHAT ARE YOUR OTHER OPTIONS? If you don't want to make a claim and you don't want to be legally bound by the settlement with Apple, the settlement with AT&T, or both settlements, you must send a written request postmarked no later than December 20, 2013. If you don't timely exclude yourself, you will not be able to sue, or continue to sue, the defendant in that settlement about the legal claims in this case and will be bound by any judgment. If you exclude yourself, you will not be eligible to receive benefits under that settlement. If you do not exclude yourself, you may object to one or both of the settlements or Class Counsel's fee application. Objections must be received by December 20, 2013. The detailed notice (available by calling 1800-248-1504 or going to www.3Gdataplansettlement.com describes how to exclude yourself or object. The Court will hold a hearing in this case (In re Apple and AT&T iPad Unlimited Data Plan Litigation, Case No. 5:10-02553-RMW) on February 7, 2014 at 9:00 a.m. to consider whether to approve (1) the settlements; (2) attorneys' fees and expenses for Class Counsel of up to $1,750,000; and (3) service awards of up to $1,000 for each of the five class representatives who represented the class in this case. You may appear at the hearing, but you don't have to. To obtain a detailed notice and Claim Form, or to review Class Counsel's fee application once it is filed, go to www.3Gdataplansettlement.com or call toll free 1-800-248-1504. WHO REPRESENTS YOU? The Court has appointed Class Counsel to represent the Class. The law firms appointed as Class Counsel are listed in the detailed notice, available by calling 1-800-248-1504 or at www.3Gdataplansettlement.com. You may hire your own attorney, but you will have to pay that attorney. For more information, visit www.3Gdataplansettlement.com or call 1-800-248-1504.
Class action against Apple and others in anti-poaching lawsuit given the green light
A class action lawsuit against Apple, Google and a number of other high-profile tech companies has been given the green light by US District Judge Lucy Koh. The lawsuit stems from anti-poaching agreements that Apple and a number of other tech companies entered into from 2005 through 2009. Parties to the agreement all promised not to recruit employees from one another. The companies involved include Apple, Intel, Google, Intuit, Pixar, Lucasfilm and Adobe. The suit, originally brought forth by five software engineers in 2011, alleges that the anti-poaching agreements served to lessen their employment opportunities, thereby weakening their negotiating power and ultimately affecting the salaries they were able to command. Counsel for the plaintiffs previously indicated that the anti-poaching agreements may have compressed employee salary levels by 5 to 10 percent. We reported back in April that class action status for the suit was initially denied because the proposed class group encompassed more than 160,000 employees and was deemed to be overly broad. Since then, the plaintiffs made some adjustments and it now appears that the definition of the proposed class group is sufficiently narrow to have warranted a green light from Koh. SFGate reports: Koh denied class-action status for the suit in April but gave the plaintiffs' lawyers another chance to show that the alleged conspiracy had a common, anticompetitive impact on employees in different companies that could be shown in a single trial. The evidence they have since presented meets that test, she said in her ruling this week. "This extensive evidence supports plaintiffs' theory that each technical employee's compensation was linked to those of her peers within and across (all of the) firms," Koh said. She said there was also evidence that the companies engaged in "collusive communications" and "benchmarked their compensation structures" to each other. If the facts of this case sound somewhat familiar, it's because a number of the accused companies, including Apple, settled a suit over the same matter with the US Justice Department back in 2010. A chart highlighting the chronology of the anti-poaching agreements can be seen below. As you can see, Apple got in the game early, striking deals with Pixar, Adobe and Google. Note that the current class action suit only targets Apple, Adobe, Google and Intel as the other three companies already reached confidential settlement agreements with the plaintiffs. It'll be interesting to see how this all plays out given that the plaintiffs appear to have a rather strong case that even includes damning emails from company CEOs. For instance, one message that was brought to light during the US DOJ case involves Steve Jobs emailing then Google CEO Eric Schmidt and asking him to stop trying to recruit an Apple engineer. "I would be very pleased if your recruiting department would stop doing this," the email read. Schmidt subsequently responded to Jobs, informing him that he'd pass the email along and that he would ask the folks responsible to "get this stopped." Another damning email penned by Jobs involves him threatening former Palm CEO Ed Colligan with legal action if he kept recruiting Apple employees. Colligan's response to Jobs reads like a smoking gun. Your proposal that we agree that neither company will hire the other's employees, regardless of the individual's desires, is not only wrong, it is likely illegal. [...] Palm doesn't target other companies -- we look for the best people we can find. l'd hope the same could be said about Apple's practices. However, during the last year or so, as Apple geared up to compete with Palm in the phone space, Apple hired at least 2 percent of Palm's workforce. To put it in perspective, had Palm done the same, we'd have hired 300 folks from Apple. Instead, to my knowledge, we've hired just three. A trial on the matter is scheduled for May 2014.
Judge appoints external monitor to ensure Apple complies with antitrust laws
This past July, US District Judge Denise Cote found Apple guilty of colluding with book publishers in an effort to raise the price of e-books across the industry. Following that, the Department of Justice proposed a wide array of remedies to ensure that Apple wouldn't run afoul of antitrust laws in the future. One of the proposed remedies called for the court to appoint an external monitor tasked with keeping an eye on Apple as to ensure that they comply with antitrust laws going forward. On Wednesday, Judge Cote appointed former Assistant US Attorney Michael Bromwich as that external monitor. CNET reports: Bromwich was one of two names picked by the Justice Department as well as plaintiff states as part of last month's injunction ruling. As monitor, he'll work from inside Apple to maintain the company's compliance with US antitrust laws. Bromwich filled a similar, independent monitor role within the Metropolitan Police Department of the District of Columbia a little more than a decade ago, and more recently served as part of US oversight on the oil industry. Apple previously argued that an external monitor was wholly unnecessary, but ultimately failed to persuade Cote. Bromwich will keep an eye on Apple's antitrust compliance for two years. Note that the two-year period is less than the five-year period initially proposed by the DOJ. Lastly, Apple earlier this month filed a motion indicating that it plans to appeal Cote's ruling. Formal arguments on the matter, however, won't be submitted until early 2014.
Apple hit with second class action suit regarding overtime pay
For the second time, Apple has been hit with a class action lawsuit from a former employee who claims that he was not fairly compensated for "off the clock" activities that should have been subject to overtime pay. Recall that a similar suit was filed against Apple back in July of this year. The latest lawsuit was filed by Taylor Kalin, who worked for more than two years at an Apple retail store in Spokane, Wash. Kalin alleges that as an employee, he was required to stand in line in order to check devices in and out. What's more, he was also required to stand in line for security checks before leaving on his lunch break for the day. These lines, the suit alleges, were often so long that employees would routinely have to wait upwards of 30 minutes before being able to leave, even though they were already off the clock. Kalin's attorney, Peter R. Dion-Kindem, explained to Law360: Apple has the policy and practice of forcing its employees to undergo security screenings when leaving for lunch and at the end of the day, but fails to compensate its employees for the time they are forced to wait in these lines. Apple also improperly fails to pay its employees for time spent waiting to 'clock in' before work and after meal breaks and for time checking in equipment used by its employees. Kalin is asking for statutory damages, restitution, injunctive relief and attorneys fees.
Scott Forstall may re-emerge as witness in upcoming Apple/Samsung trial on damages
Since his unceremonious firing last October, we haven't heard a peep from or about former Apple executive Scott Forstall. If you recall, rumor has it that Tim Cook effectively told Forstall to take a permanent vacation after the long-time Steve Jobs protégé refused to sign off on a letter apologizing to consumers for glitches in Apple's Maps app. Now comes word that Forstall may re-emerge as a witness during Apple and Samsung's upcoming trial where the only issue to be determined will be how much Samsung owes Apple for infringing upon a number of Apple's design and utility patents. Macworld reports: The two sides Friday filed a joint pretrial statement and lists of potential witnesses they may call. Apple's list includes Phil Schiller, the company's senior vice president of worldwide product marketing, and Scott Forstall, the former senior vice president of iOS software. Forstall, of course, testified during the Apple/Samsung trial last summer where he revealed a number of previously unknown tidbits about the iOS design process and the secret history behind the development of the iPhone. Given that the upcoming trial, slated to get underway in November, will focus exclusively on damages, we likely won't get much more juicy information. Nonetheless, it will be interesting to see Forstall take the stand given that he's been 100% absent from any sort of limelight since leaving Apple nearly 12 months ago.
Apple asks for sanctions after Samsung executives improperly looked at Apple's licensing agreement with Nokia
During the course of Apple's original patent lawsuit with Samsung, the South Korea-based tech conglomerate routinely raised the ire of Apple's legal team for engaging in behavior that was ethically questionable at best. Apple, for instance, accused Samsung of purposefully destroying evidence it was required to hand over during discovery. Notably, this wasn't the first time Samsung was accused of engaging in such behavior, having been hit with sanctions in 2004 for willfully destroying emails in its lawsuit with MOSAID Technologies. Now, Samsung is at it again, with Apple requesting sanctions after finding out that Samsung executives were improperly given access to secretive documents from Apple and Nokia's 2011 licensing agreement. During the discovery phase of litigation, great pains are made to ensure that sensitive information -- whether it be social security numbers of employees, future business plans or in this case, confidential licensing information -- does not fall into a competitor's hands. It is only with the "Highly Confidential" designation that a company can confidently hand over documents that would otherwise be detrimental if released to the public. Now the documents seen by Samsung executives were marked "Highly Confidential -- Attorneys' Eyes Only." As the marking so bluntly indicates, the documents in question should have never been accessed by anyone not on Samsung's legal team, which in this case was the law firm of Quinn Emanuel. Not only did Samsung employees at large have access to documents from Apple marked "Highly Confidential," they also seemed to gloat about it. Here's what we know based on a court order from Magistrate Judge Paul Grewal who writes that the rules of confidentiality may have, in fact, been breached by Samsung. During the course of discovery between Apple and Samsung, Apple produced a number of documents pertaining to its June 2011 licensing agreement with Nokia. Again, these documents were designated "Highly Confidential -- Attorney Eyes' Only." Further, Apple also produced confidential licensing agreements it had signed with Ericsson, Sharp and Philips. Sometime later, in March 2012 to be exact, Samsung's legal team sent Samsung a report on damages put together by expert Dr. David J. Teece. Teece's report referenced the aforementioned highly confidential documents and as such should have been marked "Highly Confidential -- Attorney Eyes' Only" as well. It, however, was not. Nor were confidential aspects of the report redacted. Grewal's order reads in part: The report as distributed included key terms of each of the four Apple license agreements. Samsung's outside counsel posted the report on an FTP site that was accessible by Samsung personnel. An email providing instructions to access the FTP site was addressed to the regular client distribution list used by counsel to provide Samsung personnel updates regarding this case. The information was then sent, over several different occasions, to over fifty Samsung employees, including high-ranking licensing executives. Specifically, on at least four occasions between March 24, 2012 and December 21, 2012, Samsung's outside counsel emailed a copy of some version of the report to Samsung employees, as well as various counsel representing Samsung in courts and jurisdictions outside the United States. Now, flash forward to June 2013. In a meeting held between Nokia and Samsung licensing executives, Samsung executive Dr. Seungho Ahn told Nokia's Paul Melin (Nokia's Chief Intellectual Property Officer) that he knew specifics from Nokia's licensing deal with Apple. Specifically, according to Mr. Melin, Dr. Ahn stated that Apple had produced the Apple-Nokia license in its litigation with Samsung, and that Samsung's outside counsel had provided his team with the terms of the Apple-Nokia license. Mr. Melin recounts that to prove to Nokia that he knew the confidential terms of the Apple-Nokia license, Dr. Ahn recited the terms of the license, and even went so far as to tell Nokia that "all information leaks." Mr. Melin also reports that Dr. Ahn and Samsung then proceeded to use his knowledge of the terms of the Apple-Nokia license to gain an unfair advantage in their negotiations with Nokia, by asserting that the Apple-Nokia terms should dictate terms of a Samsung-Nokia license. This, of course, is merely how events transpired according to Melin. Is it possible that Samsung has a different take as to how things went down? It's hard to say because Samsung, not surprisingly, has been conveniently quiet on the matter. Not only have they chosen not to provide sworn testimony from any Samsung executives who attended the meeting, they've also "failed to supply the court with any evidence at all regarding other uses of the Apple-Nokia license, or those of the other confidential licenses." Why might this be the case? Because Samsung, believe it or not, asserts that it's done nothing wrong. Even though Samsung concedes that "dozens of individuals" accessed Apple's confidential licensing agreement, they content that a violation of the protective order can only occur if done willfully. For anyone who closely followed Apple and Samsung's trial from the summer of 2012, the following excerpt from Grewal's order might sound eerily familiar. Counsel further denied the need for any formal discovery into the matter, even though three months after the breach was brought to its counsel's attention, Samsung is unable to provide evidence on even the most basic questions, such as: who has now had access to the confidential licensing information? For what purpose? When? Where? How? Has Samsung relied on any of the confidential information in taking any position before any other court or jurisdiction? Exactly what steps has Samsung taken to prevent dissemination and use of the confidential information in the future? In each instance, the only response available seems to be, "We're working on it." While Grewal stops short of saying that Samsung should be slapped with sanctions, he notes that Samsung's solution -- compile a log of all documents that reference Teece's damages report -- is wholly insufficient. And with Apple and Samsung set for another patent infringement trial in months, Grewal writes that time is of the essence. Consequently, Grewal writes that Samsung has until October 16 to produce pertinent documents. They must also make Dr. Ahn and other Samsung employees available for deposition. Lastly, Grewal writes that "Nokia shall be allowed access to and full participation in all of the above discovery." A hearing on the matter is set for October 22, 2013.
Judge tosses out Apple's motion regarding Lodsys
Apple licensed US Patent #772,078 from original owner Intellectual Ventures to allow for in-app purchases of iOS apps. The patent, now owned by Lodsys, covers "Methods and systems for gathering information from units of a commodity across a network." Lodsys started suing iOS developers for patent infringement and Apple filed a motion to intervene in patent infringement lawsuits in 2011. Patent trolls -- also known as Patent Assertion Entities ("PAEs") -- are "firms with a business model based primarily on purchasing patents and then attempting to generate revenue by asserting the intellectual property against persons who are already practicing the patented technologies," according to the FTC. According to Joe Mullin from Ars Technica, "Lodsys became one of the most-scorned patent holders in 2011, by making seemingly small cash demands (just 0.575 percent of your revenue, please!) against small app makers, who it said were infringing its patents that cover in-app purchasing and upgrades." Ars Technica further states that, "the East Texas judge [US District Judge Rodney Gilstrap] overseeing Lodsys' systematic patent attack on app developers has refused to even consider Apple's motion." This means that Lodsys is now free to "threaten developers for months, and perhaps even years, to come," according to Mullin. An amicus brief, which is loosely an offer to assist in understanding an issue being handled by a court by parties with a strong interest in the issue (but not part of the court action) was filed by the App Developers Alliance and the Electronic Frontier Foundation. The brief states: "Lodsys's pattern of sending out demand letters, suing a seemingly random sampling of app developers and then settling with those app developers, promises that those developers' claims of a right to use the technology in question will never be heard. The resulting uncertainty leaves developers in limbo. In fact, there have been reports that app developers are indeed pulling apps out of the US markets entirely. Charles Arthur, App Developers Withdraw from US as Patent Fears Reach 'Tipping Point', The Guardian (July 15, 2011)." Mullin recounts some of the pending suits and companies involved, and provides more detail on how those companies are handling the cases. "Apple's argument that the Lodsys patents are already paid for could have been a clean and effective way to shut down much of the Lodsys patent campaign." It looks like that isn't going to happen anytime soon. Related Stories FTC publishes a long list of questions it wants to ask "patent trolls", Ars Technica, 9/27/13. FTC Seeks to Examine Patent Assertion Entities and Their Impact on Innovation, Competition, FTC, 9/27/13. Lodsys offers to settle patent dispute with fortunate developer, TUAW, 8/8/13. Apple allowed to intervene in Lodsys patent case, TUAW, 4/13/12. Lodsys now going after apps with More Apps buttons, TUAW, 7/13/11. Apple files motion to intervene in Lodsys suit, TUAW, 6/10/11.
Brazilian judge whacks IGB Electronica in iPhone trademark lawsuit
Apple has won its appeal against IGB Electronica in Brazil regarding the "iPhone" name in that country, according to BNAmericas. The company had been locked in a lawsuit with Brazilian company IGB Electronica, which was granted the Brazilian iPhone trademark in 2007. IGB originally applied for the iPhone trademark in 2000 and since 2007, it has been selling a smartphone by the name of "Iphone" under its G-Gradiente brand. In February, Apple lost the trademark dispute with IGB, but now a judge has thrown that verdict out and ruled that both companies may use the iPhone name. In his ruling, the judge said that though IGB owned the trademark in the country first, they did nothing with it until after Apple's iPhone went on sale elsewhere in the world. He credited Apple with creating a brand under the "iPhone" name, noting its trademarks in other locations. IGB Electronica plans to appeal this decision.
Apple accuses Samsung of trying to include 'prior art' evidence in upcoming damages trial
In August of 2012, a jury awarded Apple US$1.05 billion in damages after finding that Samsung smartphones infringed upon a number of Apple patents. Since then, the total award amount has been in flux. In July of this year, Judge Lucy Koh lowered the damages award by $450 million on account of jury error. Furthermore, a trial is scheduled for November in order to determine how much of the remaining $600 million balance should be awarded to Apple. With the upcoming trial on damages about two months away, Apple late last week filed a motion seeking to preclude Samsung from making any references to "prior art" (or otherwise attacking the validity of Apple's patents) during the upcoming trial. Apple's brief reads in part: A jury has already found Apple's patents to be valid and infringed, and those issues are not to be relitigated. Rather, the retrial is limited to determining the appropriate amount of damages for Samsung's infringement. What specifically raised Apple's antennae is that Samsung's list of witnesses and exhibits strongly suggests that the Korea-based tech conglomerate is, in fact, hoping to raise questions as to the validity of Apple's patents. For instance, Apple notes that two of Samsung's proposed witnesses previously testified during the initial trial and exclusively discussed the alleged invalidity of Apple's patents. Why then, Apple asks, are they being called back if the only issue on the table is how much Samsung owes Apple? Coupled with Samsung's efforts to "introduce at trial dozens of documents related to its invalidity arguments," it's clear why Apple is crying foul. Apple bluntly states that any debate regarding the validity of Apple's patents is inappropriate, irrelevant and completely outside the scope of the upcoming trial. Permitting Samsung to make arguments about the prior art would prejudice Apple by improperly suggesting that Apple's patents are not valid -- contrary to the first jury's determination. It would also confuse the issues and distract the jury from the limited damages questions that remain at issue in this case. Accordingly, preclusion is appropriate. A hearing on Apple's motion is scheduled for October 17. I've uploaded the filing to Scribd for anyone interested in taking a closer look at it.
Court lifts injunction barring iCloud mail push notifications in Germany
Florian Mueller of FOSS Patents is reporting that a German court this week lifted an injunction which precluded iOS users in Germany from receiving iCloud mail push notifications. The injunction had been in place for about 18 months before being suspended this week. Recall that the patent underlying the injunction is owned and was initially asserted by Motorola back in April of 2011. According to Mueller, once Apple posts a bond -- which effectively serves as a pre-payment in the likelihood Motorola ultimately prevails on the merits -- push notifications for affected iOS users will be enabled once again. On the flip side, it's also possible that Apple, in the event that it emerges victorious in this litigation, will be entitled to damages from Motorola for the "enforcement of an injunction that shouldn't have been granted in the first place."
Apple sued over Find my iPhone
Well this is certainly a fitting story given a recent report that Apple remains the top target for patent trolls. GigaOM is reporting that a nonpracticing entity based out of Texas is suing Apple, alleging that services such as Find my Friends and Find my iPhone infringe upon their patents. The company in question is called Remote Locator, and per usual, information regarding ownership interests in the company and the patent itself are hard to come by. Notably, Apple isn't the only one being targeted by this particular patent as several other suits have been filed against Google and carriers as well. The invention itself is US Patent 5548637, which covers a method for "locating personnel and objects in response to telephone inquiries," and describes a system for using infrared transmitters to route calls to individuals or objects in large buildings like a hospital. Remote Locator is requesting a jury trial, and with respect to damages, is seeking an injunction and payment for past infringement. Patent trolls in recent years have become an increasing nuisance in the tech sphere, and with Apple holding billions upon billions in the bank, it makes sense why they're often targeted. Unfortunately, though, patent trolls have also taken to suing and arguably shaking down small-time developers who often lack the resources to adequately defend themselves against what are often frivolous lawsuits. The flurry of lawsuits filed by Lodsys in recent memory serves as a stark example. Thankfully, the Obama administration has taken notice of the patent troll phenomenon and has proposed some new guidelines that will hopefully serve to lessen the impact of patent trolls. All that said, we'll keep an eye on this case and see how Apple responds.
Court: Apple needs monitoring after 'blatant' e-book price fixing
Following Judge Denise Cote's ruling that Apple conspired with book publishers to increase the price of e-books across the board, the DOJ put forth a proposal intent on rectifying the damage caused by Apple's actions. The proposal was extremely far-reaching, and called for Apple to allow competitors like Amazon to include links to their own e-book stores from within their iOS apps. The proposal also suggested a court-appointed monitor should be hired to keep an eye on Apple's activities and to ensure that the company doesn't run afoul of antitrust laws going forward. What's more, the proposal also called for Apple to hire an internal antitrust compliance officer to train and educate Apple executives about the ins and outs of antitrust laws. While Cote stated yesterday that Apple doesn't have to worry about a punishment that affects the way it conducts its business (translation: its in-app purchase rules are safe), the same can't be said for corporate oversight. Reuters reports: She said a monitor would be necessary, after Apple had failed to show it learned its lesson from its "blatant" violations of antitrust law. The monitor, she said, would likely be installed to review Apple's internal antitrust compliance program and procedures and recommend changes, and also required annual antitrust training for employees in Apple's e-books and content businesses. Apple had vigorously contested hiring of a monitor, saying in court papers it would be "extremely costly and burdensome." The Justice Department had earlier also sought to force Apple to hire an internal antitrust compliance officer, but has since backed off that demand. Apple, of course, plans to appeal the ruling.
Case alleging Apple has monopoly over the App Store dismissed on procedural grounds
In 2011, a group of attorneys filed a bizarre lawsuit against Apple alleging that Apple holds a monopoly over the App Store to the extent any one who wants to purchase an iOS app must go through Apple's App Store. Consequently, the lawsuit took umbrage with the fact that developers wishing to sell iOS apps were forced to fork over 30% of their profits to Apple. On Thursday, Bloomberg reported that a Judge dismissed the case on procedural grounds. U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California, ruled today that the plaintiffs weren't in a legal position to bring the suit as they hadn't bought the applications at issue in the case. The complaint can still be amended and refiled, Gonzalez said. The plaintiffs failed to prove "collective allegations that they have been deprived of lower cost alternatives, paid higher prices for Apple-approved applications, or had their iPhones disabled or destroyed," Gonzalez wrote. "At a minimum, plaintiffs must allege facts showing that each named plaintiff has personally suffered an injury-in-fact based on Apple's alleged conduct." As one would expect, a lawyer for the plaintiffs indicated that refiling the case won't be a problem, noting that "we can add the extra detail very easily." The full ruling, along with the procedural history of the case, can be read below courtesy of AppleInsider. Ruling to Dismiss App Store Monopoly Suit by Mikey Campbell
Judge to determine damages in Apple e-book case
The Mac Observer's Jeff Gamet has written a thoughtful analysis of the continuing Department of Justice legal battle against Apple regarding e-book pricing. As you'll remember, Judge Denise Cote found Apple guilty of conspiring with a group of book publishers to raise book prices. Now Judge Cote has said that she'll bring the company back to the courthouse in May 2014 to impose damages. The US Department of Justice, which brought the case against Apple in the first place, has asked Judge Cote to slap the company with a 10-year plan that would force oversight of Apple's contract negotiations and business activities. Apple's already responded to the plan, calling the proposal "draconian," "punitive" and "wildly out of proportion." The company has a good point -- the government is proposing to use injunction as a way to regulate Apple's businesses, and the 10-year plan goes well past the duration of the legal issues in the case. Apple has filed an appeal, noting that Judge Cote made errors in the trial by refusing to allow certain evidence and disregarding other evidence in her ruling. If Apple can win the appeal, the remedies imposed by the court would be dropped. Should the company lose the appeal and the Department of Justice has its way with imposing unprecedented government control on Apple's business dealings, the company stands to lose out on the e-book market. As Gamet notes in closing, Apple isn't going down without a fight, and the company has the resources to take the case all the way to the US Supreme Court if necessary. In the meantime, Amazon continues to sell books at loss-leader pricing and driving competitors out of the market.
Judge denies Apple request in e-book case
The first of the many Apple legal rulings and requests expected today came out poorly for the company. Judge Denise Cote refused a request by Apple for a temporary suspension of her ruling last month stating that Apple had conspired with publishers to raise e-book prices and violated antitrust laws. Just yesterday, the e-book publishers the company allegedly conspired with came to Apple's defense, asking the increasingly hostile Department of Justice to do away with a proposal to "remedy" the allegedly "illegal" activities Apple engaged in. As our sister site Engadget notes, "It appears that Apple is fighting a losing battle. We're sure that there are still tricks in its legal arsenal, but there is little indication that Cupertino will be able to avoid terminating its existing agreements and will be barred from engaging in agency pricing before the end of the DoJ's five-year ban."
Daily Update for August 9, 2013
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Lodsys offers to settle patent dispute with fortunate developer
In May 2011, a largely unknown patent-holding firm named Lodsys began threatening iOS developers with lawsuits if they didn't agree to license Lodsys' patent portfolio, which allegedly covered technology encompassing in-app purchases. The case made headlines not only because Lodsys targeted many small developers who lacked the resources to adequately defend themselves, but also because of the patented technology involved. The ability for developers to implement in-app purchases comes from Apple and is an integral part of the iOS ecosystem. In other words, if Lodsys' claims were valid, they could theoretically shake down an endless number of iOS developers. The warning letters sent out by Lodsys indicated that the company wanted 0.575 percent of all revenue earned during the period a developer made use of in-app purchasing. Shortly thereafter, Apple filed a motion to intervene in the Lodsys proceedings against iOS developers. Apple argued that all iOS developers are de facto licensees to Lodsys' patents due to Apple's own licensing agreement with Lodsys. Indeed, it's worth noting that companies like Apple, Google and Microsoft all had licensing deals with Lodsys that were in place prior to Lodsys' patent suit rampage. In a letter sent to Lodsys CEO Mark Small, Apple explained: First, Apple is licensed to all four of the patents in the Lodsys portfolio. As Lodsys itself advertises on its website, "Apple is licensed for its nameplate products and services." ... Under its license, Apple is entitled to offer these licensed products and services to its customers and business partners, who, in turn, have the right to use them. Lodsys, however, refused to back down and it wasn't long before the patent holding company began targeting Android developers as well. By the end of May 2012, Lodsys had filed lawsuits against seven smaller-scale iOS developers. By the end of July, Lodsys upped the ante by going after big-name developers like Rovio and EA. Soon thereafter, suits against other big development companies like Gameloft were filed. Over the past few months, however, we haven't heard much of anything about Lodsys-related lawsuits or proceedings. Earlier today, however, developer Todd Moore wrote that he received an unexpected letter from Lodsys wherein they offered to drop their suit against him. I did not have to pay any money to Lodsys or sign a license agreement. I also did not sign a confidentially agreement so I'm free to talk about this matter. So what did I have to agree to? Never to sue Lodsys over its patents (I otherwise would have the right to ask a court to rule their patents invalid if I wanted) Dismiss all motions with prejudice (we had filed a motion to dismiss that also sought to recover my attorneys fees, costs and expenses) Make a donation to a mutually agreeable charity Well, that's certainly great news given that no one likes to see patent trolls try and scam a quick payday from hardworking developers, especially given the costs typically associated with legal battles. To that end, Moore writes that he was being defended on a pro bono basis by attorneys who together spent upwards of 280 hours on the case. At an hourly rate that would otherwise vary between US$500 and $750 an hour, it's easy to see why Lodsys initially set its sights on smaller developers. Moore writes that if he hadn't been graced with pro bono representation, he would have had to pay $190,000 in legal fees. MacRumors proffers an interesting theory: It remains unclear whether Lodsys' move to dismiss the case against Moore and TMSOFT is part of a strategy shift for the firm or if it simply realized that it was not worth pursuing a protracted fight against a small developer receiving free legal representation. So it remains to be seen if Moore is the exception or if other iOS developers will receive similar letters from Lodsys. We can only hope that it's the latter.
Book publishers also not happy with DOJ's proposal for Apple in e-book price fixing case
Following US District Judge Denise Cote's decision that Apple conspired with book publishers to raise the price of e-books, the DOJ last week announced a sweeping proposal aimed at remedying the fallout from Apple's allegedly "illegal" activities. The proposal, which you can read about here, is extremely broad and curiously heavy-handed. The proposal reads in part: The department's proposal, if approved by the court, will require Apple to terminate its existing agreements with the five major publishers with which it conspired – Hachette Book Group (USA), HarperCollins Publishers L.L.C., Holtzbrinck Publishers LLC, which does business as Macmillan, Penguin Group (USA) Inc. and Simon & Schuster Inc. – and to refrain for five years from entering new e-book distribution contracts which would restrain Apple from competing on price. Under the department's proposed remedy, Apple will be prohibited from again serving as a conduit of information among the conspiring publishers or from retaliating against publishers for refusing to sell e-books on agency terms. Apple will also be prohibited from entering into agreements with suppliers of e-books, music, movies, television shows or other content that are likely to increase the prices at which Apple's competitor retailers may sell that content. To reset competition to the conditions that existed before the conspiracy, Apple must also for two years allow other e-book retailers like Amazon and Barnes & Noble to provide links from their e-book apps to their e-bookstores, allowing consumers who purchase and read e-books on their iPads and iPhones easily to compare Apple's prices with those of its competitors. Apple was quick to file a brief in opposition to the proposal, characterizing the DOJ's proposal as "punitive" and "draconian." Also not happy with the DOJ's far-reaching proposal are the book publishers themselves. The Wall Street Journal reports that the aforementioned publishers aren't too keen on the DOJ's proposal to the extent that it adversely affects them as well. In a motion filed on Wednesday, the book publishers argue: The provisions do not impose any limitation on Apple's pricing behavior at all; rather, under the guise of punishing Apple, they effectively punish the settling defendants by prohibiting agreements with Apple using an agency model. It really seems like the only winner in all of this is Amazon.
Samsung's market value plummets following US presidential veto
Over the weekend, the Obama administration vetoed the US International Trade Commission's import ban pertaining to older generation iPhones and iPads. The move marked the first time since the '80s that a US president vetoed an ITC ruling. While Apple is of course thrilled with the Obama administration stepping up to protect FRAND rights, the same can't be said for Samsung, or its investors. In the wake of the ITC veto, Samsung's market value dropped by over US$1 billion. Also expressing concern regarding the veto was the South Korean government itself, which on Monday issued a statement exclaiming that the veto will have a negative impact on patent property rights. Reuters reports: "We express concerns about the negative impact that such a decision would have on the protection of patent rights," the Ministry of Trade, Industry & Energy, said in a statement. The ministry called on the U.S. trade body and the Obama administration to make "fair and reasonable decisions" as Samsung faces a decision on Friday as to whether some of its phones and tablets infringed on Apple's patents and should be banned from imports into the United States. As the legal drama between Samsung and Apple continues to evolve, the ITC will issue another ruling on Friday, this time regarding whether or not it should ban Samsung products that Apple alleges infringe upon its own intellectual property.
Apple calls DOJ proposal "draconian", "punitive", and "wildly out of proportion"
In the wake of US District Judge Denise Cote's ruling that Apple colluded with book publishers to raise the price of e-books, the DOJ yesterday issued a proposal aimed at remedying the alleged damage caused by Apple. To say that the DOJ proposal is harsh and curiously overbroad would be an understatement. The proposal calls for Apple to put an immediate end to its existing agency-model contracts with book publishers. It also would preclude Apple from "entering into agreements with suppliers of e-books, music, movies, television shows or other content that are likely to increase the prices at which Apple's competitor retailers may sell that content." What's more, the proposal calls for Apple to allow e-book retailers like Amazon and Barnes & Noble to provide links to purchase e-books from within their own e-book apps. And as if that weren't enough, the proposal also lays out that Apple should be appointed an external monitor by the court who will oversee Apple's activities going forward and ensure that Apple doesn't violate any antitrust laws. On top of that, the DOJ also wants Apple to hire an internal antitrust compliance officer to train and educate Apple executives and employees about the finer points of antitrust law. Apple has since filed a brief in opposition to the DOJ's proposed remedy where it naturally objects to nearly all aspects of the proposal. The brief, first spotted by The Next Web, states in part: Plaintiffs' proposed injunction is a draconian and punitive intrusion into Apple's business, wildly out of proportion to any adjudicated wrongdoing or potential harm. Plaintiffs propose a sweeping and unprecedented injunction as a tool to empower the Government to regulate Apple's businesses and potentially affect Apple's business relationships with thousands of partners across several markets. Plaintiffs' overreaching proposal would establish a vague new compliance regime-applicable only to Apple-with intrusive oversight lasting for ten years, going far beyond the legal issues in this case, injuring competition and consumers, and violating basic principles of fairness and due process. The resulting cost of this relief-not only in dollars but also lost opportunities for American businesses and consumers-would be vast. Apple also articulates that the DOJ proposal as it pertains to retailers like Amazon being able to include links to e-books from within iOS apps is far beyond the scope of the issues in the case. Apple is under no duty to allow other retailers to offer apps on the iPad in the first place, much less on terms that subsidize their operations," the argument says. "Nevertheless, Apple allows all e-book retailer apps that are compliant with its policies-including those offered by Amazon, Barnes & Noble and other competing e-book retailers-to be offered in its App Store. It also permits consumers to download e-books purchased through another e-book retailer's website or bookstore onto its e-reader devices without charge. Apple concludes by stating that it does not believe it has run afoul of antitrust law, and that the conduct the court found objectionable has since ended and will not happen again. Consequently, Apple writes that no further injunction is necessary, and that should one be issued, it should be "narrowly tailored to redress the specific conduct this Court found anticompetitive." Say what you will about Apple's actions leading up to the case, but it's hard to read the DOJ's proposal as anything other than absurdly far reaching. The full ruling can be read below. 8.2.13 Apple's Brief Opposing Injunctive Relief
