It appears that Apple has made a deal with patent troll Digitude Innnovations to help the company’s efforts to sue nearly every major mobile device maker. Digitude earlier this month launched one of its first legal attacks against Nokia, RIM, Motorola, HTC, LG, Samsung, Sony, and even Amazon, filing a patent infringement claim with the International Trade Commission. Conspicuously absent from that list is iPhone maker Apple, which until late November owned two of the patents being used to target “certain mobile devices” from its competitors.
As discovered by TechCrunch, Apple recently transferred ownership of a dozen patents to a shell company called Cliff Island LLC, which happens to share a New York office with the investment firm Altitude Capital Partners. Like Virginia-based Digitude, Altitude was founded by investor Robert Kramer.
According to a Forbes report, Kramer’s Altitude has in the past funded efforts to extract large settlements from the likes of Microsoft, RIM, and eBay over patent disputes. Earlier this year, Kramer put up $50 million of Altitude’s funds to found Digitude. The money helped fund its acquisition of over 500 “consumer electronics patents” to both license and litigate.
“Our goal is to generate great returns for our investors,” Kramer told Forbes in June. “We have reached out to many of our prospective customers to encourage them to become early strategic licensees.”
Similar in some respects to Intellectual Ventures, Digitude makes deals with licensees for blanket access to its patent portfolio. Instead of money, however, Digitude prefers payment in patents it can use to either entice new licensees or sue the pants off them in court.
Digitude claimed in April to have made its first strategic deal with “one of the world’s leading consumer electronics companies.” Though it didn’t name the company specifically, the dozen patents Apple turned over to Cliff Island were acquired in April this year from Mitsubishi, and generally involve functions of “mobile communications devices” or “mobile terminals.”
Those patents were then transferred to Cliff Island in late November, with the two patents involved in the ITC dispute being transferred to Digitude the following day. Days later, Digitude filed its compliant with the ITC. Further cementing the connection between Apple and Digitude is the existence of a confidential license agreement involving both companies and filed as evidence in the ITC case.
It’s not clear just how complicit Apple is in Digitude’s business, but EFF staff attorney Julie Samuels told TechCrunch that if Apple was deliberately aiding Digitude’s patent trolling, “it would be horrifying.” And even if Apple were somehow coerced into settling with Digitude, Samuels doubts that “Apple didn’t have any other options.”
As we noted recently, Apple has a tendency to use its intellectual property in ways that seem inconsistent. For instance, an Opera developer claims that Apple has a pattern of using patents to slow down the W3C’s open standards process, while promoting open standards when it gives Apple leverage against its competitors. This situation with Digitude seems similar; Apple opposes the tactics of patent trolls when they come after iOS developers, but seems to support them if it aids its ongoing legal battle for dominance of the smartphone market.