Jury selection is slated to begin today in the long-running NetAirus v. Apple lawsuit, Bloomberg reports. The case, first filed over three years ago, complains that the iPhone violates a 1997 patent held by NetAirus owner Richard Ditzik, documenting a handheld device merging a computer with wireless communications over local- and wide-area networks. Apple has maintained that the Newton MessagePad achieved similar technology as early as 1994, rendering NetAirus’ patent obsolete.
“The technology at issue was so well known at the time NetAirus filed its patent, that independent patent watchdogs have made NetAirus’s patent a poster child in the movement to limit the proliferation of facially invalid patents,” Apple wrote in a July 2011 petition to dismiss the case. In 2012 US District Judge John Kronstadt allowed the suit to go forward, on the basis of NetAirus’ claim that the iPhone violates a patent for a phone configured as a PDA that switches between Wi-Fi and cellular. The company was, however, denied a motion to add the iPad and more recent iPhones to the scope of the complaint.
As the case moves towards trial, NetAirus will be limited in the damages it can potentially claim. A May 2013 ruling in Apple’s favor prevented any damage payments from being collected for infringements before October 8th, 2012; that’s when the US Patent and Trademark Office issued a re-examination that Kronstadt agreed would “substantially” change the claims of the NetAirus patent. The company can currently only pursue damages from iPhone 4 sales after the October 2012 marker. Via a separate complaint submitted in May however, the company is pursuing damages from the iPad, iPhone 4S, and iPhone 5.
NetAirus suffered another setback on November 8th, when Kronstadt excluded testimony from Joseph Gemini, the company’s damages expert. The judge decided that Gemini’s view that royalties should be set at $3 per unit for one patent claim and $3.50 per unit for five others was missing quantitative analysis and wasn’t reliable. Also blocked was testimony from Ditzik, arguing that a royalty rate of 3 to 5 percent of US sales would be reasonable. “An opinion setting forth a 3-5 percent royalty rule of thumb based on ‘patent articles on the web’ is improper expert opinion offered by a lay person,” Kronstadt commented.
