Factual Background

Dr. Heinz Mattes is the named inventor of the US patent number 6,038,295 (the '295 patent.)

The '295 patent has a priority date of June 17, 1996. The '295 patent was originally assigned to Siemens Aktiengesellschaft of Munich, Germany. TLI is the current owner of the '295 patent via assignment.

In the mid 1990's, Dr. Mattes, while working as a scientist for Siemens, recognized that mobile telephony and digital photography, each then in their infancy, would likely become more and more popular. Dr. Mattes recognized that mobile telephones could be integrated with digital cameras, resulting in a proliferation of the quantity of digital images that could and would be taken.

Dr. Mattes invented a revolutionary way of communicating and recording such digital images, which allowed numerous images to be simply and quickly recorded, tracked, accessed and transmitted.

In 1996, Dr. Mattes' invention was among the winners of a Siemens idea competition, leading to Siemens initiating a project to develop a cellular telephone with an integrated camera. The '295's patented inventions are applicable to the uploading and organization of digital images from a telephone.

Over the past few years, smart cellular telephones that incorporate sophisticated digital cameras have exploded in popularity, as has social media. Today, hundreds of millions of digital images are uploaded onto computer servers and social media websites every day, including onto Apple. Apple's products use the '295's patented technology, without license or authority, to classify those images so that they can be easily uploaded, stored, organized, retrieved and shared.

Apple's Infringing Products

Apple provides computer, cellular phone and web based products and services, including without limitation its iCloud, iPhoto, iMovie and Photo Stream products. Apple purports that the iPhone is used in 97% of the Fortune 500 and 91% of the Global 500, and JDC market research indicates that the iPhone holds 59% of the enterprise market.

Apple purports that "Photo automatically organizes your photos and videos by year, by collection and by moment." In addition, Apple purports that "iCloud lets you share what you want with the people you choose" and that users can create "a shared photo stream for your vacation and you can see snapshots and videos from everyone in your group."

Apple offers websites, software and downloadable applications, especially designed for mobile devices having telephones, including iPhone mobile telephones, and other mobile telephone platforms, which allow telephone users to easily characterize and upload digital images to Apple servers. Apple image-uploading software is preloaded on mobile devices having telephones, and its website can be directly accessed from many mobile telephones, which also uploads digital images characterized with user-information. Apple also provides mobile telephones. In addition, Apple provides downloadable applications, which also provide for uploading digital images to Apple servers. Apple entices its users to upload digital images by providing easy-to-use platforms and instructions, and Apple stores and archives the digital images uploaded to its servers using the characterization information provided by its users. As a result, visitors are attracted to Apple where they can easily view, retrieve and share those images, resulting in more visitors to Apple, the purchase of additional Apple products and services, and increased Apple revenues.

So that these digital images could be captured, uploaded, stored and organized, Apple fashioned products and processes that employ TLI's patented technology. The infringing products include, but are not limited to, the products and processes that Apple uses to capture, upload, store and organize the digital images it receives from mobile devices having telephones.

The patent infringement case presented in today's report was filed in the Virginia Eastern District Court, Alexandria Office. The Presiding Judge in this case is noted as being Judge T. S. Ellis. The Referring Judge is noted as being Judge Ivan D. Davis.

Side Note: It should be noted that Apple had prototyped an Apple videophone PDA at MacWorld 1995, predating the Siemens patent and the nice story that Dr. Mattes recognized that mobile telephony and digital photography would likely become more and more popular. Obviously Apple's prototype had recognized this fact much earlier on. And, if Apple had a prototype in 1995, they likely had a patent supporting it.

A Note about Patent Trolls

A 2011 study showed that Patent Trolls cost tech companies $29 Billion and a 2012 study made the case that patent trolling was out of control. In the first half 2013, Apple remained the #1 Target of Patent Trolls. In the second half of 2013 Apple remained in the top three.

On December 5, 2013, The US House of Representatives overwhelmingly passed the "Innovation Act" bill on Thursday aimed at discouraging frivolous lawsuits by patent holders. The move was backed by companies like Apple, IBM, Cisco and Google. House Judiciary Committee Chairman Bob Goodlatte (R., Va.) sponsored the bill, which won strong bipartisan support in passing by a 325-91 vote. Goodlatte said his bill "takes meaningful steps to address the abusive practices that have damaged our patent system and resulted in significant economic harm to our nation."

In Addition to the new act, the FTC is currently examining the practices of patent trolls or Patent Assertion Entities (PAEs) which are firms with a business model based primarily on purchasing patents and then attempting to generate revenue by asserting the intellectual property against persons who are already practicing the patented technologies. The FTC is conducting the study in order to further one of the agency's key missions—to examine cutting-edge competition and consumer protection topics that may have a significant effect on the U.S. economy.

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