Turns out that for Apple Inc., one of the most innovative companies on the planet does have at least one big drawback. The Cupertino, Calif., company says it is the No. 1 target for patent trolls.
The tech giant criticized what it called “Patent Assertion Entities” or PAEs in two briefs that were filed in two separate cases that are currently pending before the U.S. Supreme Court, according to The Los Angeles Times.
“PAEs do not invent, manufacture or sell any product,” wrote Apple in one of the briefs. “Many of them do nothing more than acquire vague patents, and then use litigation or the threat of litigation to negotiate royalties that are far larger than what the patents warrant.”
A letter about PAEs that Apple wrote to the FTC in December has also been uncovered. In fact, Apple claimed it was the number one target of PAE lawsuits, with 92 such suits in the last three years. Apple also noted that it had already resolved 57 of the 92 cases against it. 51 cases were settled out-of-court to avoid legal costs, while six other cases were dropped in court.
PatentFreedom, an organization that tracks lawsuits filed by non-practicing entities, calculated that Apple has been targeted 129 times in the last three years. Although AT&T was ranked as the No. 1 target of NPE lawsuits last year, Apple holds the record for NPE lawsuits with 191 since 2009.
“PAEs have become a drag on technological innovation, inflicting billions of dollars in deadweight losses every year,” stated Apple in one brief. In the letter to the FTC, Apple claimed that 43 percent of patent-infringement lawsuits filed in 2013 were brought by PAEs.
Apple noted that PAEs often use the threat of legal fees to win settlements from practicing companies, since a company will have to pay for its legal defense even if it wins the case. But, Congress may remedy this situation as The House recently approved legislation that would make it easier for winners of patent infringement cases to be awarded legal fees.
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