Apple wins appeal to keep $308 million U.S. patent verdict at bay

A U.S. appeals court on Friday affirmed a decision to throw out a $308.5 million jury verdict against Apple Inc (NASDAQ:AAPL) for allegedly infringing a patent related to digital rights management.

The U.S. Court of Appeals for the Federal Circuit in Washington, D.C., upheld an East Texas federal judge's ruling that Personalized Media Communications LLC's patent was invalid because the company engaged in misconduct before the U.S. Patent and Trademark Office.

PMC denied to comment on the decision. Representatives for Apple did not immediately respond to a request for comment.

PMC, a patent licensing company, first sued Apple for infringing several patents in 2015. An East Texas jury said in August 2021 that the FairPlay software used in Apple's iTunes and App Store to decrypt movies, music and apps infringed one of the patents and awarded the company $308.5 million in damages.

District Judge Rodney Gilstrap overturned the verdict four months later. He said PMC's

patent was unenforceable because thecompany had used a “deliberate strategy of delay” in applying for the patent, representing a “conscious and egregious misuse of the statutory patent system.” Gilstrap said PMC had used an improper “submarine” strategy that some applicants employed before 1995 to delay patents from becoming public until a market developed for their invention.

The Federal Circuit affirmed Gilstrap in a 2-1 ruling, finding that PMC's “inequitable scheme to extend its patent rights” had prejudiced Apple.