Apple Victory: German Court Tosses $2.15 Billion Patent Troll Lawsuit

judge court gavel (640x477)

A German court has dismissed a $2.15 billion lawsuit (1.57 billion euros) brought against Apple (NASDAQ:AAPL) by German patent-licensing company IPCom, reports Reuters. According to FossPatents, IPCom was suing Apple over the California-based company’s use of a standard essential patent (SEP) that covered a 3G/UMTS data transmission method. The patent in dispute is titled, “Access of a mobile station to a random access channel in dependence of its user class,” and can be viewed at European patent site Espacenet. As noted by FossPatents, the patent covers a method for prioritizing emergency calls made from mobile phones.

IPCom acquired the rights to the patent from a portfolio of wireless patents that it bought from Bosch after the electronics company stopped making car phones.  Per FossPatents, IPCom’s lawsuit against Apple was an attempt to claim a partial damages payout over the iPhone maker’s use of the technology in its devices.

Besides rejecting IPCom’s lawsuit against Apple, Germany’s Mannheim Regional Court also threw out a lawsuit based on the same SEP that the patent-licensing company had brought against Chinese smartphone maker HTC, reports FossPatents. IPCom has also filed similar lawsuits against Vodafone (NASDAQ:VOD) and Nokia (NYSE:NOK). SEPs are patented technologies that are considered essential for an industry. As such, holders of SEPS are obligated to license SEP technologies to other companies according to FRAND (fair, reasonable, and non-discriminatory) licensing standards.

Apple, Samsung (SSNLF.PK), BlackBerry (NASDAQ:BBRY), Google (NASDAQ:GOOG), and many other prominent tech companies recently sent an open letter to European regulators that expressed their concern over the negative impact of Patent Assertion Entities (PAEs), also commonly referred to as “patent trolls.” According to statistics cited in the letter, PAE lawsuits cost U.S. businesses $29 billion in 2011 alone.

Apple also recently criticized PAEs in two friend-of-the-court briefs that it filed for cases that are currently pending before the U.S. Supreme Court. “PAEs do not invent, manufacture or sell any product,” wrote Apple in one of the briefs according to the Los Angeles Times. “Many of them do nothing more than acquire vague patents, and then use litigation or the threat of litigation to negotiate royalties that are far larger than what the patents warrant.”

PatentFreedom — an organization that tracks lawsuits filed by non-practicing entities – calculated that Apple has been sued 129 times in the last three years. According to PatentFreedom, a non-practicing entity is a company that derives “the majority of its revenue from the licensing or enforcement of its intellectual property.” IPCom is a “license manager for patents,” according to its official website. The company was founded in 2007 and holds over 1,000 mobile communications patents in Europe, Asia, and the U.S.

Follow Nathanael on Twitter (@ArnoldEtan_WSCS)

More From Wall St. Cheat Sheet: