Apple Ordered to Pay $506 Million to the University of Wisconsin for Infringing its Computer Processor Chip Patent

Patent Judgments and Awards 

Written by Baraa Kahf and Kendall Loebbaka

Edited by John Sganga, Joseph Cianfrani and Boris Zelkind

On July 25, 2017, a federal court in Wisconsin ordered Apple to pay a whopping $506 million for infringement of a patent on computer processor chip technology held by the Wisconsin Alumni Research Foundation (WARF), the licensing arm of the University of Wisconsin.  WARF had sued Apple in January 2014.  After trial in October 2015, a jury found in favor of WARF and awarded $234 million in damages.  This jury award represented a $1.61 per unit royalty on the processor chips used in Apple’s mobile devices.  WARF sought a premanent injunction or, alternatively, an award of ongoing royalties for sales occuring after the trial.  The court rejected WARF’s motion for a permanent injunction.  Apple conceded that a royalty award for continued sales was warranted, and the court agreed.  WARF proposed an ongoing royalty of three times the jury’s per unit rate of $1.61, while Apple proposed keeping the same rate.  The court nearly doubled the royalty rate to $2.74 per unit for Apple’s sales after October 26, 2015, the date of the judgment, through the expiration of the patent on December 26, 2016.  The court did not find that Apple infringed willfully, but increased the rate because it found that WARF’s “improved bargaining position after the jury’s finding of infringement and validity” justified the increased royalty rate.  The $2.74 per unit royalty rate was the rate originally proposed by WARF’s damages expert and discounted by the jury.  Apple has appealed to the Federal Circuit.