Apple share price: Tech giant ordered to pay $533 million for patent infringement

on Feb 25, 2015
Updated: Oct 21, 2019
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Apple Inc (NASDAQ:AAPL) has been ordered to pay $532.9 million by a US federal jury, which found yesterday that the company’s iTunes platform infringed three patents owned by the Texas-based patent licensing company Smartflash. The plaintiff was seeking $852 million in damages, claiming that it was entitled to a percentage of sales of Apple devices, including the iPhone, iPad and Mac computers, which were used to access the digital music service.

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“We refused to pay off this company for the ideas our employees spent years innovating and unfortunately we have been left with no choice but to take this fight up through the court system,” a spokeswoman for Apple said in a statement to news outlets.
Smartflash, founded in the early 2000s by inventor Patrick Racz, claimed that Apple had intentionally infringed the patents. According to the company’s complaint, Racz met with a person named Augustin Farrugia in around 2000, to discuss the technology covered by the patents. Farrugia later joined Apple and became a senior director there, the complaint said.

Apple challenged Smartflash’s case on multiple fronts, arguing that the patents were invalid and weren’t infringed. The iPhone maker said that Smartflash didn’t have complete control of the patents and waited too long to file the suit. It also pledged to appeal the decision.
Smartflash’s sole business is licensing seven patents, which Racz co-invented. The company is based in Tyler, Texas, were the trial was held.

In yesterday’s trading, Apple shares closed 0.6 percent lower at $132.17, trimming the company’s market capitalisation to $774.5 billion. The stock has gained 19.7 percent since the start of the year.
According to the Financial Times, the 41 analysts offering 12 month price targets for Apple have a median target of $135.00, with a high estimate of $160.00 and a low estimate of $60.00. As of February 14, 2015, the consensus forecast amongst 53 polled investment analysts covering Apple has it that the company will outperform the market. This stance has been maintained since the sentiment of investment analysts deteriorated on September 29, 2011, the FT notes.
As of 10:27 GMT, Wednesday, 25 February, Apple Inc. share price is $132.18.

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