Apple (NASDAQ:AAPL) is being sued by Patent Harbor, a non-practicing entity that claims the Cupertino-based company is infringing on its patented technology with its iMovie application, reports PriorSmart. The patent-infringement claim is based on a 1997 patent titled, “Apparatus and method for assembling content addressable video.” In the filed complaint, Patent Harbor noted that Apple’s iMovie application infringed on “claim 1 of the ‘514 patent.”
As noted in the patent, claim 1 covers a particular method for creating video data tags and using the tags to label, store, and assemble content video images. In its filed complaint, Patent Harbor noted that the “iMovie application allows a user of the computer to take pre-recorded video and create a title or chapter list (similar to the scene selection menu provided on a commercial DVD/BD disc), where the title or chapter menu has a description (pictorial or written) of the video that will be accessed if the viewing user selects a particular title or chapter from the scene selection menu.” According to Patent Harbor, the iMovie software’s method for creating and using “tags” to access video content infringes on its patent claim. Apple’s iMovie software can be used on the MacBook Air, the MacBook Pro, the iMac, the Mac Pro, and the Mac mini.
Patent Harbor is seeking “compensatory damages in an amount no less than a reasonable royalty,” as well as “pre-judgment and post-judgment interest on the damages awarded.” Patent Harbor also asked the court to determine “an on-going royalty for future acts of infringement if appropriate.” The complaint was filed in the District Court for the Eastern District of Texas, a popular venue for many intellectual property licensing companies.
According to information provided by small business service directory Manta, Patent Harbor is a privately held company based in Texas that has only two employees. According to PatentFreedom, a non-practicing entity — or NPE — is a company that derives “the majority of its revenue from the licensing or enforcement of its intellectual property.” These entities are also popularly referred to as “patent trolls,” although Patent Freedom prefers to avoid the use of that term. PatentFreedom is an organization that caters to companies that are being sued by non-practicing entities.
Since Patent Harbor is classified as a legal services business and doesn’t appear to manufacture or sell any products, it appears to fit Patent Freedom’s definition of an NPE. According to data compiled by PatentFreedom, Apple holds the overall record for the number of times that it has been sued by NPEs, with 191 lawsuits since 2009.
NPEs are also sometimes referred to as “Patent Assertion Entities,” or PAEs. Apple noted the economic impact of PAEs in a friend-of-the-court brief obtained by the Los Angeles Times earlier this year. “PAEs have become a drag on technological innovation, inflicting billions of dollars in deadweight losses every year,” wrote Apple.
More From Wall St. Cheat Sheet:
- BMO Capital Raises Apple’s Price Target and EPS Estimates
- Judge Denies Apple’s Motion Over Samsung’s ‘False’ Opening Statements
- Apple Emails Reveal Samsung Nearly Got ‘1984’ Ad Agency Fired
Follow Nathanael on Twitter (@ArnoldEtan_WSCS)