Apple Told to Pay $23.6 Million Over Pager Technology

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Apple Inc. was told to pay a Texas company $23.6 million after a jury found its iPhone and other devices used SkyTel pager technology from the 1990s without permission.

Patents developed for the SkyTel network and owned by Mobile Telecommunications Technologies LLC are valid and were infringed by Apple, a federal jury in Marshall, Texas, said late yesterday. MTel, which got about a tenth of what it had been seeking in damages, claimed Apple’s Airport Wi-Fi products and iPhone, iPad and iPod Touch devices with messaging used the technology.

This is the second trial in as many months in which Cupertino, California-based Apple was accused of using pager technology without paying for it. It won the first case, involving a different company, last month in California.

MTel’s patents in yesterday’s case were issued in the mid-to late-1990s and are either recently expired or nearing the end of their terms.

Mobile Telecommunications was a pioneer in wireless messaging in the 1990s, when its SkyTel 2-Way paging system was the smartphone of its day. Now the company is the licensing arm of closely held United Wireless, which co-owns and operates the legacy SkyTel network for use by first responders and doctors.

“The guys working back then at SkyTel were way ahead of their time,” said Andrew Fitton, chief executive officer of United Wireless. “This is vindication for all their work.”

MTel claimed that Apple devices rely on foundational technology for the transmission and storing of messages and should pay royalties. The Lewisville, Texas-based company was seeking $237.2 million in damages, or about $1 per device.

‘About Fairness’

“Apple is refusing to acknowledge the contributions of others,” MTel lawyer Deron Dacus of the Dacus Firm in Tyler, Texas, told the jury in closing arguments. “This case is about fairness.”

Apple denied infringing the patents and said MTel was trying to take credit for emojis -- digital icons that express emotion -- and calendar invites. It also argued that the patents were invalid because they didn’t cover any new innovations even when they were first issued. At most, Apple lawyer Brian Ferguson told the jury, MTel was entitled to $1 million.

“A damage award of $237 million is not common sense, it’s not logical,” said Ferguson, of Weil Gotshal in Washington.

Kristin Huguet, a spokeswoman for Apple, had no comment today on the verdict.

Samsung Electronics Co., Apple’s chief rival in the U.S. for smartphones, also is accused of infringing the patents. Jury selection in that case is scheduled for Dec. 15.

The case is Mobile Telecommunications Technologies LLC v. Apple Inc., 13-258, U.S. District Court for the Eastern District of Texas (Marshall).

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