Patent-holding company’s $533M verdict against Apple is dust on appeal

A representative patent image showing how Smartflash's "data storage and access system" works. (credit: USPTO)

It looked like Smartflash LLC had Apple right where it wanted it after a jury awarded the patent-holding company $533 million—one of the largest patent verdicts in history.

The dreams of patent riches have gone up in smoke after a panel of appeals judges ruled that all three of Smartflash's patents are invalid as overly abstract. At this point in history, a one-employee patent-holding company with no novel legal argument has an infinitesimal chance of getting the attention of the US Supreme Court, so Smartflash's path has ended with the opinion (PDF) published yesterday.

Smartflash is owned, at least in part, by Patrick Racz, the named inventor on US Patent Nos. 7,334,720, 8,118,221, and 8,336,772. Racz lives on the English Channel's Isle of Jersey and filed for the patents in the late 1990s when Smartflash was an operating company with a real product, a type of early digital media player. But by 2002, Smartflash was out of business. Racz kept the patent applications alive, though, and saw them through to issuance.

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