Caltech Wins $1 Billion Patent Verdict

The California Institute of Technology won a massive patent infringement verdict after it sued Apple and Broadcom for infringing upon four of the school’s Wi-Fi-related patents. The court awarded Caltech $1.1 billion in total; Apple is to pay $837 million and Broadcom is to pay $270 million.

The award is based on Caltech’s estimate of the royalties the university would have received if the defendants had properly licensed the patents before using them in Wi-Fi chips for their new devices, including iPhones, iPads, and MacBooks. Hypothetically, Apple would have paid $1.40 per device and Broadcom would have paid $0.26 per device to license 802.11n and 801.11ac Wi-Fi chips.

The patents-in-suit are U.S.  Patent Nos. 7,116,710; 7,421,032; 7,916,781, and 8,284,833 (“the Asserted Patents”). The complaint stated, “The Asserted Patents disclose a seminal improvement to coding systems and methods. The Asserted Patents introduce a new type of error correction codes, called ‘irregular repeat and accumulate codes’ (or ‘IRA codes’)…The Asserted Patents implement these novel IRA codes using novel encoders and decoders. The claims in the Asserted Patents describe the error correction methods in ways that enable a person of ordinary skill in the art to implement them using simple circuitry, providing improved performance over prior art encoders and decoders.”

The patent inventor did not originally intend to use the technology for Wi-Fi, and the patents were only licensed once. It only crossed his mind to use it for Wi-Fi when he learned Apple and Broadcom were potentially infringing on the patents.

Apple and Broadcom intend to appeal the decision. Additionally, Apple and Broadcom recently announced a $15 billion deal for Broadcom to supply Apple with chips for the next three and a half years. It is unclear if Caltech intends to sue other similar companies.

The suit was filed in the California Central District Court. Caltech was represented by Quinn Emanuel Urquhart & Sullivan. Apple and Broadcom were represented by Wilmer Hale and Mayer Brown.