Apple Ordered to Pay $5.7 Billion Over Taptic Engine Patents in Record Verdict

A federal jury in San Diego has ordered Apple to pay $5,721,961,750 to haptics company Taction Technology, after finding that the Taptic Engine used in iPhones and Apple Watches infringes two of Taction's patents. Reuters described it as the largest US verdict of its kind to date, and Apple says it will appeal (Bloomberg Law, Claims Journal).

What the case was about

Taction, a San Diego company whose technology is used in headphones and gaming headsets, sued Apple in 2021 in the US District Court for the Southern District of California. It alleged that the Taptic Engine, the component behind the tactile feedback felt when typing or receiving a notification, used vibration-based transducer technology covered by US Patent Nos. 10,659,885 and 10,820,117 without a licence, and that Apple reverse-engineered the technology from two of Taction's Kannon gaming headsets. Apple denied the allegations and argued the patents were invalid.

The Federal Circuit found the district court had wrongly excluded parts of Taction's expert testimony and misread the patent claims. After two days of deliberation, the seven-member jury sided with Taction while finding that Apple's infringement was not willful.

Why the number is so large

Jurors found Apple infringed claims 17 and 19 of the '885 patent and claim 16 of the '117 patent, and rejected Apple's invalidity arguments. The figure reflects the scale of iPhone and Apple Watch sales across the period covered rather than a fixed penalty. Because the infringement was not found willful, Taction cannot seek enhanced damages, which judges can triple in cases of serious, willful infringement, though post-trial motions could still change the final amount.

Apple said it strongly disagreed with "today's verdict and the damages awarded, which are entirely unsupported by the facts," adding that "Apple does not use Taction's technology, and we will appeal." Taction's counsel at Quinn Emanuel said the company had waited five and a half years for trial; outlets attribute the quote to Lance Yang or to Tigran Guledjian of the same firm.

Litigation funding

Discovery revealed that Taction's case was financed by Gronostaj Investments LLC and Kenosha Investments LP, which separate litigation identified as an indirect subsidiary of Burford Capital, a firm that funds lawsuits in exchange for a share of any award, according to Bloomberg Law.

How this compares with past Apple patent fights

The California Institute of Technology won about $1.1 billion from Apple and Broadcom in 2020 over Wi-Fi technology, and Apple has fought a long-running dispute with Masimo over blood oxygen sensing in the Apple Watch. A $5.7 billion verdict is a different order of magnitude.

What to watch next

The case moves to post-trial motions before Judge Robinson, then Apple's appeal, which could take years and may reduce or overturn the award. The verdict is a money judgment and has no immediate effect on iPhone or Apple Watch sales, hardware or pricing.

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