Apple sued for patent infringement by a Native American tribe seeking royalty payments from iPad sales

“Apple gets sued for patent infringement dozens of times each year, mostly by little-known shell companies with no products — the types of companies often derided as ‘patent trolls,'” Joe Mullin reports for Ars Technica. “But the newest lawsuit seeking royalty payments from iPad sales is likely a first: the recently created plaintiff, MEC Resources LLC, is wholly owned by a Native American tribe. The MEC lawsuit appears to be using Native American legal rights to avoid having the US Patent Office perform an ‘inter partes review’ that could invalidate the patent.”

“MEC Resources is wholly owned by the Mandan, Hidatsa, and Arikara Nation, also known as the Three Affiliated Tribes. Neither MEC’s CEO nor its lawyers responded to a request for comment from Ars. However, recent developments in other patent cases shed light on why there’s suddenly a connection between patents and Native Americans,” Mullin reports. “Earlier this month, the New York-based St. Regis Mohawk Tribe disclosed that it was given a set of valuable patents belonging to the drug company Allergan. In return for holding on to those patents, which were licensed back to Allergan, the company would pay the tribe an annual royalty of $15 million, as long as the patents remained valid.”

“Both the tribe and Allergan were explicit about why they executed the deal: to avoid having the US Patent Office review their patents in a procedure called inter partes review, or IPR,” Mullin reports. “But there are certain parties that can’t be challenged with an IPR because of ‘sovereign immunity,’ an old legal concept codified in the 11th Amendment of the US Constitution.”

“Even though sovereign immunity has helped at least two public universities dodge IPRs, it isn’t clear that the strategy will work for Native American tribes,” Mullin reports. “Their sovereign immunity is granted by Congress and, thus, can be revoked or changed by Congress. States, on the other hand, derive their sovereign immunity from the 11th Amendment.”

Read more in the full article here.

MacDailyNews Take: This seems to be a clear abuse of a loophole that Congress will likely have to look at closing.


    1. Are you saying that legal loopholes have never been fixed under any other Administration of Congress? Are you asserting that only Trump can possibly lance this boil on the buttocks of the patent system? You are really reaching for rationales that supports Trump. You must be related to botty.

      Of course, the irony of your post is that this has apparently never happened before. The article indicates that this creepy legal arrangement was set up this month under the Trump Administration. Perhaps the lawyers are counting on Trump soon being distracted by the opportunity to send longer tweets?

      1. Wrong, i dont like Trump but i hate Lair and sell out Hillary Clinton and Obama even more. Obama should have left Libya alone as that started the migrant crisis, which in turn had a great affect in the UK with Brexit. Regarding Trump what i meant (and you misunderstood) is that American people voted him because he talked straight, has financial independence and is not a sell out / push over by money rich lobbies. I liked Trumps policies on banning travel and emigration from muslim countries, however that list was not complete as Pakistan , Saudi and other terrorist expert nations were not included. Also Trump is hampered by the opposition so he is not making progress which is bad too. In all we are in a mess

    2. It’s Northern hemisphere Aboriginal descendants today and ghetto relatives of long dead slaves demanding their “fair share”. Obviously, white people living today are responsible for the behavior of folks centuries before them.

      1. It plays on a common derogatory stereotype of Native Americans, sort of like suggesting that African Americans can be bought off with watermelons and crack cocaine or that all Mexican-Americans are rapists and drug dealers.

        My grandmother was a registered member of the Choctaw Nation, and I can assure you that she would find the remark deeply offensive and racist. She might laugh if the joke was told by another Native American, but this sort of humor—like the use of the N-word—is best left to the members of the group itself.

        It is almost as bad as calling President Obama “The Magic Negro,” or Senator Warren “Fauxcopontas.” No, she cannot prove her ancestry, but that isn’t unusual in Oklahoma. We have never been able to locate my mother’s birth certificate, for example. The Senator isn’t a registered member of the Cherokee Nation, but that is true of anybody in the rather large set of people whose unquestionably Indian ancestors were left off the Dawes Rolls in the early 20th century. Her mother and other older family members reported being discriminated against as part-Indians, and there is no real evidence to establish that they were lying.

        In any case, racial discrimination and stereotypes are not joking matters for those who are the butt of the jokes.

      1. I usually take such comments a bit more lightheartedly than that and think others should as well. Humor is typically sharp tongued and somewhat uncomfortable – as it’s always been. I don’t necessarily think every utterance is something to be taken literally or to be embarrassed about. Lighten up and worry less. “Fauxcohantas” was actually pretty clever.

        1. Humor is fine and I have a thick skin. You can call me whatever you want – botty and Fwhatver have pretty much exhausted the possibilities. I also believe that it is good to shake people up once in a while. Uptight people need to be offended now and again to reset the boundaries of their sensibilities.

          But botty’s “humor” is actually just an aspect of his overt political attack strategy on this forum. botty got old a long time ago.

      2. Oh, I don’t know. I think he actually does a remarkable job of reflecting the absurdity, hypocrisy, fear and hate that even moderate conservatives are bombarded with these days. He is a product of the sheer loathing leftists have for anyone who disagrees with them. He is “The Joker” to the left’s sanctimonious elitist “Batman,” in other words he is ironically a creation of the left. Would I prefer that all discourse be civil, rational, and intellectual? Well yes, but I want CBS to put Vulcan back also. I cannot have everything I want, so I must learn to enjoy what I have, and I’ve learned to enjoy bot.

  1. All this… and no information whatsoever about the patent in question, and how Apple and Indian Tribes are at odds.

    Come on MDN, throw your readers a bone here and put up a little bit more info.

    1. A patent troll company incorporated in Delaware filed suit against Apple claiming that the iPad violated US Patent No. 6,137,390. I’m not a technical expert, but the patent looks to me like it is describing an ordinary audio speaker made of routine industrial materials. Normally, the first step that the defendant in one of these cases takes is to petition the Patent Office to invalidate the patent because it does not describe anything that is patentable, generally because it is just an obvious application of prior art… like this. That is generally the fastest and cheapest way to dismiss one of these silly claims.

      To get around that approach, the original patent troll transferred the patent to a company that is wholly owned by the Mandan, Hidatsa, and Arikara Nation, also known as the Three Affiliated Tribes. As a recognized Indian Nation, the tribes enjoy treaty status as a dependent sovereignty, which grants them sovereign immunity—like a state government or the US Government itself. In the absence of a federal statute or treaty modification, the Patent Office has no jurisdiction to hear a request to review and invalidate a patent held by a sovereign power.

      That means that Apple is left with the sole remedy of defending the tribes’ suit in federal court, which is a much more onerous burden than a patent review. That translates into higher litigation expense and the uncertainty of dealing with a lay jury that doesn’t understand technology, but might be sold on the notion that the world’s most valuable company is trying to take advantage of a bunch of poor Native Americans.

      The added expense and uncertainty will substantially raise the amount that Apple might be willing to offer to make the suit go away. It is blackmail… albeit legal blackmail.

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