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Apple's Billion-Dollar Patent Rejected But The War Is Not Over

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2/365 - all my iPhones (Photo credit: stovak)

In litigation with Samsung, Apple declared its Patent No. 7,844,915 as the most commercially valuable of the three multi-touch patents that Samsung was accused of violating.

In my view, this patent is absolutely necessary for Apple’s pinch-to-zoom feature claims against its competitors.

It is old news that Apple won a $1 billion award against Samsung.  What's new is that the United States Patent and Trademark Office (USPTO) has rejected the patent that Apple considered most valuable, rejecting all 28 claims of this patent.  Here is the abstract:

At least certain embodiments of the present disclosure include an environment with user interface software interacting with a software application. A method for operating through an application programming interface (API) in this environment includes transferring a set bounce call. The method further includes setting at least one of maximum and minimum bounce values. The set bounce call causes a bounce of a scrolled region in an opposite direction of a scroll based on a region past an edge of the scrolled region being visible in a display region at the end of the scroll.

Apple had demanded $3.10 per unit royalty for the future use of this patent.

Apple bulls may take solace in the fact that the USPTO rejection is tentative.  It is not uncommon for the USPTO to reject a patent only to subsequently reinstate it.  The tentative patent rejections are not final but are also not meaningless.

There are indications that the scale is tipping against Apple and this may be the beginning of Apple losing the war.  Risks in Apple are rising.  I advocate surrounding core long-term positions with short-term trades to enhance returns, as I've done in my newsletter model portfolio, selling 80% of our position.

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About Me: I am an engineer and nuclear physicist by background. I founded two Inc. 500 companies, and have been involved in over 50 entrepreneurial ventures. I am the chief investment officer at The Arora Report, which publishes four newsletters to help investors profit from change. Write me: Nigam@TheAroraReport.com.  Follow me here and get email notification when I publish a new article.

Full disclosure: Subscribers to The Arora Report are long Apple from $131 and have taken partial profits at $360, $525, $629, $568 and $610.

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