According to The National Law Journal, in 2015, Smartflash won a $533 million jury verdict against Apple for infringing on its three patents. After the decision, the company based in Tyler, Texas, was described by Apple as not making any products, employing any employees, creating any jobs or having a U.S. presence, instead, simply exploiting the patent system to seek royalties for technology that Apple invented.
Since then, the damages award has been set aside, the Patent Trial and Appeal Board (PTAB) deemed Smartflash’s three patent claims ineligible under Section 101 of the Patent Act and there are signs that the U.S. Court of Appeals for the Federal Circuit may side with Apple.
Per the Law Journal’s report, the Federal Circuit’s judges have implied that Smartflash’s claims do not meet the Supreme Court’s test from Alice v. CLS Bank. When considering Smartflash’s claims to the original technology, one judge asked “What’s so inventive about that?” while another considered that the patent claims come down to simply storage and retrieval of data and may not be sufficient enough in the non-practicing entity’s patent argument.
On behalf of Apple, attorney Mark Perry, partner at Gibson Dunn & Crutcher who also won in Alice, asserted that Smarflash’s infringement claims over technology for a “fundamental economic concept” are exactly what the Alice decision was referring to.