Apple Denied Motion to Dismiss Lawsuit Related to Disabling FaceTime on iOS 6 and Earlier

United States district judge Lucy Koh has denied Apple's motion to dismiss a lawsuit related to disabling FaceTime on iOS 6 and earlier software versions three years ago, allowing the case to proceed as a class action lawsuit. MacRumors obtained court documents of the opinion filed electronically.


The lawsuit was filed in February by California resident and iPhone 4 owner Christina Grace, who claims Apple intentionally broke FaceTime on iOS 6 and earlier by disabling a digital certificate that caused the service to cease functioning. California resident Ken Patter was later named as a second plaintiff.

FaceTime abruptly stopped functioning for all iOS 6 users in April 2014. At the time, a spokesperson for Apple said devices may have encountered a "bug" resulting from a device certificate that expired on that date, and the company advised affected users to update to iOS 7 to fix the issue.

The lawsuit, however, alleges that Apple intentionally broke FaceTime, prioritizing its financial interests over its customers.

Apple used two connection methods when launching FaceTime in 2010: a peer-to-peer method that created a direct connection between two iPhones, allegedly used between 90 and 95 percent of the time, and a relay method that used data servers from content delivery network company Akamai Technologies.

Apple's peer-to-peer FaceTime technology was found to infringe on VirnetX's patents in 2012, however, so the company began to shift toward the relay method, which used Akamai's servers. Within a year, Apple was paying $50 million in fees to Akamai, according to testimony from the VirnetX trial.

Apple eventually solved the problem by creating new peer-to-peer technology that would debut in iOS 7 in September 2013. But not all users upgraded and, seven months later, the lawsuit alleges that Apple intentionally broke FaceTime on iOS 6 and earlier to stop paying millions per month to Akamai.

Testimony from Apple's 2016 retrial with VirnetX indicated that, between April 2013 and September 2013 alone, Apple paid approximately $50 million as a result of FaceTime functioning in relay mode only on iOS 6 and earlier.

Updating to iOS 7 could be seen as the simple solution in this situation. But the plaintiffs owned an iPhone 4 and iPhone 4s, and cited internet articles that claim updating to iOS 7 significantly impairs the performance and functionality of those smartphones. Their complaint also cited Bluetooth and Wi-Fi issues.

In its now-denied motion to dismiss, one of Apple's arguments was that the plaintiffs have no right to uninterrupted, continuous, or error-free FaceTime service under the terms of its iOS Software License Agreement. Apple also said the plaintiffs didn't experience the iOS 7 issues mentioned on their own iPhones.

The class action lawsuit would apply to all iPhone 4 or iPhone 4s owners in the United States who, on April 16, 2014, had iOS 6 or an earlier version of the operating system installed on that device. The plaintiffs claim Apple's actions violate California's Unfair Competition Law and are seeking a jury trial.


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Florida Company Sues Apple, Says Apple TV’s ‘What Did He Say?’ Feature Copies Its Movie Software

Florida company CustomPlay filed a patent infringement lawsuit against Apple today, claiming the fourth-generation Apple TV's rewind with closed captioning tvOS feature copies its movie companion software.


Using the Siri Remote, Apple TV users can ask "what did she say?" and tvOS will rewind the TV show or movie by 10-15 seconds and resume playing with closed captioning temporarily enabled.

Skip to roughly the 1:02:13 mark of Apple's September 2015 event video below to see a live demo of the feature.

Skip to roughly the 1:02:13 mark of the video

CustomPlay owner Max Abecassis essentially argues he invented the idea first, based on U.S. Patent No. 6,408,128 B1, filed in 1998 and granted in 2002. A relevant excerpt from the patent's description:
A remote control capable of activating a replay function comprises a WHAT? button, key, or other replay function key or means, to enable a viewer by activating the replay function to automatically cause the system to: i) rewind or skip backwards the playing of the video a system default or a viewer specific previously defined amount, e.g. 20 seconds; ii) turn on the subtitle to a system default or a viewer specific previously selected subtitle language, e.g. English; iii) turn off the subtitle at either the point the WHAT? button was pressed or at some viewer specific previously defined point with respect to the time at which the WHAT? button was pressed, e.g. five seconds prior to, or after, the point the WHAT? button was pressed; and iv) increase the audio/dialog volume during the segment replayed.
In its complaint, filed with the U.S. District Court for the Southern District of Florida, CustomPlay says it has software that uses the patent available for download on its website. The company's homepage lists apps such as PopcornTrivia and CustomPlay, each available on the App Store for iPhone.

For one app, named One Screen, CustomPlay describes a "What?" feature that does sound similar to the Apple TV's feature.
The What? function rewinds the movie a user-defined amount of time, e.g. 20 seconds, and continues playback with the subtitles automatically enabled only during the replayed portion.
One Screen, however, is the only app listed as "coming soon" on CustomPlay's website. The company still intends to make the software available to end users, according to its complaint. It's unclear if similar functionality is included in its PopcornTrivia and CustomPlay apps, or in its DVD software for PCs.

CustomPlay's so-called "What"? feature

CustomPlay says it contacted Apple about the potential for an exclusive business relationship in 2014. The company believes Apple is aware of its patent and, without a license, proceeded to implement its patented technology in its tvOS operating system for the latest Apple TV model, launched October 2015.

Court documents obtained by MacRumors show CustomPlay seemingly mailed letters to Apple CEO Tim Cook and three iTunes executives in July 2014, and Abecassis sent a few follow-up emails to Cook later in the year, but it's unclear if Apple responded. There is no indication of Apple responding at the very least.

Apple has an unsolicited idea submission policy to prevent potential misunderstandings or disputes when the company's products or strategies might seem similar to ideas it has received, but it's unclear if it would apply in this situation, and it does not automatically excuse Apple from patent infringement.

CustomPlay's website says it is affiliated with Nissim Corporation, which appears to be a non-practicing entity, also owned by Abecassis. Nissim sued Apple last September for allegedly infringing upon seven patents related to DVD specifications. The two companies reached an unknown settlement in December.

Nissim's website says it has brought lawsuits against major companies such as Apple, Paramount Pictures, Time Warner, and 20th Century Fox Home Entertainment. All of those companies, excluding Apple, are also listed as Nissim's licensees, alongside Acer, Bose, Dell, HP, Lenovo, LG, Microsoft, Sony, and others.

CustomPlay is seeking damages of an undetermined amount from Apple, plus legal costs, and it has requested a jury trial.

Related Roundups: Apple TV, tvOS 10
Tag: lawsuit
Buyer's Guide: Apple TV (Don't Buy)

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Apple Ordered to Pay $506M to University of Wisconsin in A7/A8 Patent Dispute

U.S. District Judge William Conley today ordered Apple to pay $506 million to the University of Wisconsin's Alumni Research Foundation for infringing on a patent related to computer processing technology used in its A7, A8, and A8X chips, reports Reuters.

The $506 million total is nearly double the $234 million in damages that a Jury ordered Apple to pay back in 2015, with Conley adding an extra $272 million. According to Conley, Apple owes additional damages along with interest because Apple continued to infringe on the patent until it expired at the end of 2016.

The lawsuit in question dates back to 2014, when the Wisconsin Alumni Research Foundation accused Apple of infringing on a patent titled "Table based data speculation circuit for parallel processing computer," that was originally granted in 1998 and covers a method for improving processor efficiency.

A jury ruled that Apple's A7, A8, and A8X processors infringe on the patent, and the university has also filed a second lawsuit covering Apple's A9 chips, which has not yet been ruled on.

Apple plans to appeal the judge's decision.


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Qualcomm Says Tech Group Supporting Apple is ‘Misdirecting’ ITC With ‘Coordinated Effort’

Last week, the Computer & Communications Industry Association, a lobbying group representing Google, eBay, Amazon, Microsoft, Netflix, Intel, Samsung, and other tech companies, asked the United States International Trade Commission to reject Qualcomm's request for an import ban on some of Apple's iPhone and iPad models that use Intel chips.

The group said that banning Apple products that use Intel chips would enable Qualcomm's anti-competitive behavior and cause supply issues, resulting in harm to consumers.


Qualcomm today responded to the CCIA in a court filing, accusing the group of launching a "coordinated effort aimed at misdirecting" the ITC, reports Reuters. Qualcomm also said that the import ban it requested is not focused on Intel's chips, but the patented technology used in iPhones with Intel chips.
In its filing on Monday, Qualcomm argued that its import ban is not actually about Intel's chips, but instead concerns the patented technology that surrounds the Intel chips in current versions of the iPhone. Thus a ban on importing the phones would not hurt competition in the long term, Qualcomm argued. "Apple can purchase and utilize any LTE modem it chooses so long as it does not infringe Qualcomm's asserted patents," the company wrote.
Apple and Qualcomm have been embroiled in an ongoing legal battle following Apple's decision to sue Qualcomm in January for charging unfair royalties and refusing to pay quarterly rebates.

The fight between the two companies has escalated since then, most recently leading Qualcomm to file a patent infringement lawsuit against Apple and request an import ban for some iPhone models.

In a statement to Reuters on Qualcomm's filing this afternoon, Apple once again complained that Qualcomm makes a single chip in the iPhone but "for years [has] been demanding a percentage of the total cost of [Apple] products - effectively taxing Apple's innovation."


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Wisconsin Resident Sues Apple For Over $75,000, Claims Defective iPhone Caused House Fire

Wisconsin resident Xai Thao and her home insurance provider State Farm have jointly sued Apple for over $75,000 this week, claiming the company sold Thao a defective and dangerous iPhone 4s that started a fire in her home last year.


The lawsuit, filed in U.S. district court, alleges the house fire was the direct result of the iPhone's battery short-circuiting and heating up. Thao nor anyone else ever changed the battery in the iPhone, according to the complaint.
On or about April 1, 2016, the iPhone failed, starting a fire in Thao's home. Preliminary investigations show evidence of a significant and localized heating event in the battery area of the iPhone as well as remnants of internal shorting, indicating that an internal failure of the iPhone's battery caused the fire.
The complaint reiterates that the design, manufacture, and sale of the iPhone 4s created a "dangerous, unsafe, and defective" condition.

If designed improperly, lithium-ion batteries do have the potential of short-circuiting and catching fire, as Samsung learned the hard way with its recalled Galaxy Note7 last year. But, that hasn't been a widespread issue with the iPhone 4s since it launched in 2011, so this is certainly an isolated incident.

Thao and State Farm are seeking at least $75,000 in damages from Apple, but the exact amount is to be determined if and when the case is heard.

Tag: lawsuit

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Qualcomm CEO Says Out of Court Settlement With Apple Could Happen

Apple and Qualcomm have been embroiled in a bitter legal battle since the beginning of the year, and though the fight has escalated in recent weeks, Qualcomm CEO Steve Mollenkopf today told Fortune that an out of court settlement is not out of the question.
"There's not really anything new going on," Mollenkopf said speaking at the Brainstorm Tech conference in Aspen. About the Apple dispute, he explained "those things tend to get to resolved out of court and there's no reason why I wouldn't expect that to be the case here."
Mollenkopf went on to say that he has no specific news of a settlement and that nothing new has happened in the case. "I don't have an announcement or anything so please don't ask, he told Fortune. Mollenkopf made a similar statement back in February, but that was before the legal battle between the two companies intensified. At that time, he also said he didn't expect a public fight, something Apple and Qualcomm have not been able to avoid.


Today's interview suggests Qualcomm is still open to settlement talks, but whether that will happen remains to be seen. If Apple and Qualcomm do not settle, we can expect a legal battle that will continue on for several years.

The fight between Apple and Qualcomm started in January, after the FTC complained that Qualcomm had engaged in anticompetitive patent licensing practices. Apple sued Qualcomm for $1 billion just days later, accusing the company of charging unfair royalties for "technologies they have nothing to do with" and refusing to pay quarterly rebates.

According to Apple, Qualcomm has overcharged it by billions of dollars by "double-dipping" with unfair patent licensing agreements, while Qualcomm claims its innovations are "at the heart of every iPhone" and that the royalties are fair.

Qualcomm went on to countersue Apple in April, accusing the company of breaching licensing agreements, making false statements, and encouraging regulatory attacks against Qualcomm, which prompted Apple to stop making royalty payments to Qualcomm entirely until a court can determine the proper amount due.

Apple in late June expanded its lawsuit against Qualcomm, and at the beginning of July, Qualcomm filed a separate patent lawsuit against Apple and asked the International Trade Commission to block imports of select iPhone and iPad models.


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Qualcomm Seeks iPhone and iPad Import Ban in the United States

The legal battle between Qualcomm and Apple continues to escalate, with Qualcomm asking the United States International Trade Commission (ITC) to block imports of select iPhone and iPad models, reports Fortune. Qualcomm also wants to stop sales of devices that are already in the United States and has filed a new patent infringement case against Apple in the Southern District of California.

According to Qualcomm, Apple is infringing on six Qualcomm patents related to carrier aggregation and technologies that are designed to allow iPhones to save battery life while communicating. The six patents cited by Qualcomm were granted between 2013 and 2017 and are not licensed or standard-essential patents that are part of the ongoing Qualcomm v. Apple battle over royalty payments.


Qualcomm is asking the ITC to block all iPhones that are equipped with LTE chips from competing mobile communications companies, which would include AT&T and T-Mobile iPhone 7 and iPhone 7 Plus models equipped with Intel chips, along with some iPad models. In an interview, Qualcomm lawyer Don Rosenberg said Qualcomm is pursuing another lawsuit and an import ban because Apple is not willing to pay for the technology it uses.
"If Apple was a willing licensee and Apple was someone who was, like everybody else, willing to pay for what they use, we wouldn't be suing them on these patents," Don Rosenberg, Qualcomm's general counsel, said in an interview. "But they're not, and we felt we were put in a position, given all the lawsuits they've brought against us around the world, of not simply having to defend ourselves but having to take some affirmative action ourselves."
As noted in Qualcomm's ITC request, a possible ban on the iPhone 7, iPhone 7 Plus, and future iPhones wouldn't happen for approximately 18 months, so it would not affect the devices Apple plans to release in September of 2017. Qualcomm expects the ITC to look into the complaint in August and schedule a trial for 2018, and it believes the new patent infringement case filed today could be put on hold until the ITC makes a decision on the import ban.

The dispute between Apple and Qualcomm kicked off in January, when the FTC complained that Qualcomm had engaged in anticompetitive patent licensing practices. Apple sued Qualcomm for $1 billion shortly after, accusing the company of charging unfair royalties for "technologies they have nothing to do with" and refusing to pay quarterly rebates.

Qualcomm countersued in April, accusing Apple of breaching licensing agreements, making false statements, and encouraging regulatory attacks against Qualcomm, which prompted Apple to stop making royalty payments to Qualcomm entirely until a court can determine the proper amount due.

Since then, the two companies have been fighting a bitter public battle. Apple in late June expanded its lawsuit against Qualcomm and accused the wireless chipmaker of "double-dipping" with unfair patent licensing agreements. According to Apple, Qualcomm has overcharged it by billions of dollars, while Qualcomm says its innovations are "at the heart of every iPhone."

Alongside its dispute with Apple, Qualcomm is also now facing an FTC lawsuit for using anticompetitive tactics to remain the dominant supplier of baseband processors for smartphones.


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Qualcomm Says Its Innovations Are At the Heart of Every iPhone as Battle With Apple Intensifies

Apple this week expanded its lawsuit against Qualcomm, accusing the wireless chipmaker of "double-dipping" by allegedly refusing to sell chips to manufacturers unless they also pay separate royalties and enter licensing agreements at unreasonable rates, according to court documents filed electronically.


Qualcomm has since responded to the amended complaint, claiming that Apple is "trying to distract" from the fact that it has made alleged "misleading statements" about the comparative performance of its Snapdragon X12 modem, used in select iPhone 7 models to enable Wi-Fi and cellular connectivity.

Apple dual sources wireless chips from Qualcomm and Intel for the iPhone 7 and iPhone 7 Plus. Qualcomm's Snapdragon X12 modem is used in CDMA models, such as those sold by Verizon and Sprint, while Intel's XMM7360 modem is used in GSM models, such as those sold by AT&T and T-Mobile.

New York-based Cellular Insights last year found Qualcomm's modem to significantly outperform Intel's modem in the iPhone 7 Plus, based on simulated testing of LTE performance at different distances from a cellular tower.

Apple, however, publicly stated there is "no discernible difference" in performance between the Qualcomm and Intel modems in any of the models. Apple also threatened Qualcomm not to disclose the truth, according to Don Rosenberg, executive vice president and general counsel of Qualcomm.

Rosenberg said Apple's bigger misconception is that Qualcomm's innovations are limited to technology implemented in the cellular modem, when in fact its patented inventions are supposedly "at the heart of every iPhone" and "enable the most important uses and features" of those devices.

An excerpt from Qualcomm's statement obtained by MacRumors:
Apple says Qualcomm's innovations are limited to technology implemented in the cellular modem, when Apple knows well that Qualcomm has been the de facto R&D arm of the industry.

Qualcomm's patented inventions make possible not only connectivity and high-speed data transmission across mobile networks, but also high-precision GPS navigation, app store operations, power management and battery efficiency, mobile video including advanced compression, graphics, camera imaging and facial-recognition technology, audio quality and audio file compression, and much, much more.

Qualcomm's innovations are at the heart of every iPhone and enable the most important uses and features of those devices. It simply is untrue that Qualcomm is seeking to collect royalties for Apple innovations that have nothing to do with Qualcomm's technology.
Rosenberg added that Apple is "rarely first to market with any new technology, which shows it is relying heavily on the R&D investments in the most revolutionary technologies by companies like Qualcomm."

Apple argued that Qualcomm has been unfairly "levying its own tax" on the iPhone's innovations by charging royalties on a percentage of the entire smartphone's value, despite supplying just a single component of the device.

An excerpt from Apple's amended complaint:
As Apple innovates, Qualcomm demands more. Qualcomm had nothing to do with creating the revolutionary Touch ID, the world’s most popular camera, or the Retina display Apple’s customers love, yet Qualcomm wants to be paid as if these (and future) breakthroughs belong to it.
Qualcomm said the per-device royalty that it charges Apple's contract manufacturers for the right to use its licensed technologies in the iPhone is "less than what Apple charges for a single wall plug." The only first-party wall plug that Apple sells is a 5W USB Power Adapter for $19 in the United States.

Apple sued Qualcomm in January for $1 billion in alleged unpaid royalty rebates. Qualcomm countersued Apple for breach of contract, encouraging regulatory attacks on its business, and failing to engage in "good faith negotiations" for a license to its wireless patents on fair, reasonable, and non-discriminatory terms.

Qualcomm was the exclusive supplier of 3G and LTE modems for iPhones until last year, when Apple began dual sourcing from Intel.


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New Qualcomm Court Filing Wants iPhone Suppliers to Pay Royalties Amid Battle With Apple

As the legal dispute between Apple and Qualcomm continues, Qualcomm this week has requested an injunction to force Apple's iPhone manufacturers to keep paying royalties during the legal battle (via Axios). Last week, Qualcomm sued four of Apple's suppliers -- Foxconn, Pegatron, Wistron, and Compal -- for "breaching their license agreements" by failing to pay royalties on the use of Qualcomm's technology in the assembly of Apple's devices.

Now, Qualcomm is trying to force the suppliers to continue to make royalty payments amid the legal scuffle with Apple. According to Qualcomm's general counsel, Don Rosenberg, the company believes that "it is only fair and equitable" that the suppliers pay for Qualcomm's licensed technology.

"We are confident that our contracts will be found valid and enforceable but in the interim it is only fair and equitable that our licensees pay for the property they are using," Qualcomm general counsel Don Rosenberg said in a statement to Axios.
In April, Apple decided to stop making royalty payments to its manufacturers in relation to Qualcomm technology, and said it would continue doing so until the conflict was resolved. Now, in an amended section of its earlier lawsuit, Qualcomm claims Apple has promised to compensate its suppliers for any monetary loss potentially faced during the lawsuit.

According to Qualcomm, this is a tactic enacted by Apple "to make litigation unbearable" and to force a settlement, because Qualcomm claims that Apple knows it would not win if the case eventually made it to court.
By withholding billions of dollars in royalties so long as Qualcomm defends itself against Apple's claims, Apple is hoping to make litigation unbearable for Qualcomm and, thereby, to extract through a forced settlement what it knows it cannot obtain through judicial process—a below-market direct license. Apple's tactics are egregious.
The lawsuit began with an FTC complaint regarding Qualcomm's anticompetitive patent licensing practices, for which Apple sued Qualcomm, accusing the company of charging unfair royalties for "technologies they have nothing to do with." The argument died down for a few months until Apple ceased royalty payments to its suppliers in April, which particularly hurt Qualcomm because the company's licensing deals are directly with iPhone suppliers and not Apple itself.


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Apple and Visa Sued Over Digital Payment and User Authentication Technology Used in Apple Pay

Apple and Visa have been sued by a small company based in Boston this weekend, which claims that Apple Pay violates 13 patents that it holds related to digital payment systems and user authentication technology. The company behind the lawsuit, Universal Secure Registry, filed the complaint in a Federal District Court in Delaware on Sunday (via The New York Times).

According to the filing, USR chief executive Kenneth Weiss "was the first in the space, and the secure payment technology that he developed goes right to the core of Apple Pay." Specifically, Weiss' company is claiming that the 13 patents include details on authentication systems embedded in smartphones, biometric ID confirmation through fingerprint scanning, and the generation of secure, one-time-use tokens in financial transactions.


According to Weiss, he had "extensive meetings" with Visa in 2010 that centered around working together to introduce a mobile payments system into smartphones, which allegedly lead to Visa signing a 10-year nondisclosure agreement with Weiss and his company to be able to use the technology. Weiss said that Visa eventually "dropped further communication without securing a license," and that any inquiries he wrote to Apple in asking the Cupertino company to license his technology were never answered.

Then, Visa began working with Apple on a partnership that eventually lead to the debut of Apple Pay in 2014, which the lawsuit claims to have been built with the "willful infringement" of USR's patents. Weiss is now seeking damages in relation to Apple Pay and Visa's alleged patent infringement, represented by Quinn Emanuel Urquhart & Sullivan, which advised Weiss to file a suit before seeking a license agreement or royalties from Apple or Visa.
This suit seeks unspecified damages, but details the scope of the infringement, claiming, "since 2014 Apple's backend servers and Visa's payment processing network VisaNet, including Visa Token Service, have supported and processed transactions made using Apple Pay, including billions of Apple Pay transactions made in the United States."

"It is not uncommon for large companies to be unresponsive to outside suggestions for innovation or improvements to their product or technology," said Weiss. "Occasionally, these companies infringe patents and force a patent owner to file a lawsuit as the only way to financially benefit from the technology he invented."
Weiss founded Security Dynamics and invented the RSA SecurID token system, which is used to secure and authenticate important data sent by major companies, banks, and multiple branches of the United States government. USR is said to hold a portfolio of Weiss' patents related to the new lawsuit, and also including a few pending applications and foreign patents he has filed dating back to 2000.

Related Roundup: Apple Pay
Tags: lawsuit, Visa

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