Apple Suffers $23M Loss in 2-Way Pager Patent Suit

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By Brett Snider, Esq. on November 21, 2014 8:03 AM

Apple was hit with a $23.6 million loss in federal court on Tuesday, with a ruling that the tech company infringed on five patents owned by Mobile Telecommunications Technologies (MTel).

According to Inside Counsel, the Texas federal court found that Apple infringed on five of MTel's two-way pager network patents from the '90s by using MTel's tech in its iPhones and "other devices." So iPads and iPods? In any case, Apple has to pay up for six years of patent infringement.

How did Apple lose this patent case when it has won so many others?

Remember SkyTel Pagers?

MTel was suing Apple over a set of patents that it had used in its Skytel two-way paging system (here is a great 1997 New York Times review of a Skytel pager for reference). The Times lauded the SkyTel Skywriter as an "all-in-one complete communications gizmo" which could send emails as well as receive them! Remember, this was the late '90s, and doing mobile business from something twice the size of your current smartphone was mind-blowing.

You know what else can receive messages and emails? An iPhone. Since MTel's two-way paging network patents were issued in the '90s, before the iMessage system and the Mail app were a twinkle in Steve Jobs' eye, they claimed that Apple had infringed on its patents. Put together, these five patents comprise a system for dealing with undelivered messages and emails as well as delivering those over a multicarrier network (see MTel's complaint for more details.)

Although Apple has a pretty good track record in patent cases, a jury in the MTel case bought the pager company's arguments. Maybe they saw the iPhone as just a fancy pager with a camera attached.

Why $23.6 Million?

According to Ars Technica, Apple argued that at most it should pay $1 million if it was found guilty of infringing on MTel's patents (which it denied). Well, the jury somewhat did Apple a favor by knocking down the damages award from MTel's suggested $237 million to $23.6 million. MTel had based its initial figure on a $1 royalty per infringing iPhone, iPad, and iPod Touch sold.

Even though many of MTel's patents had expired by the time of the verdict, the federal court ruled that MTel was still owed back pay for infringements made while they were active.

And to be fair to MTel, they aren't just any old patent troll. They actually produced a piece of mobile technology and implemented it in a way that (at the time) was game-changing. Are the mobile messaging devices of today all indebted to MTel? Possibly.

We'll see if this win over Apple will be a portent for success in MTel's pending trial with Samsung over infringement set for the same courtroom on December 15.

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