AAPL NEWS GETTING OUT

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Apple Sued by Flash Memory Company for Patent Infringement

A San Diego company by the name of e. Digital has filed a patent infringement lawsuit against Apple. The company alleges that most of Apple's products infringe upon three of their patents regarding Flash-R technologies supposedly used in smartphones , tablets and other computers. According to the facts found at Wikipedia, the company actually makes more money suing companies than selling products.

The e. Digital Corporation has filed five separate lawsuits yesterday against Apple, Research in Motion/BlackBerry, Huawei Technologies, Futurewei and ZTE Corporation who allegedly infringe on their patents covering the use of flash memory technologies.

The suits allege infringement of multiple claims across several patents covering a broad spectrum of products. Notably, the suits seek infringement damages against smartphones and tablets for features related to, among other things, flash memory integrity testing, noise suppression technology and file management functionalities.

Anton Handal, counsel for e. Digital Corporation stated that "The Flash-R patent portfolio is rich in technologies and teachings that are central to the functionality of many current consumer electronics products. We are also seeing the use of file editing functionalities in these products that are embodied in the '170 patent. In addition, we are seeing many flash-based devices utilizing a memory integrity technology that was patented by e. Digital. Determining memory integrity is very important technology in today's highly-integrated consumer electronics."

The specific patents that are listed in Apple's lawsuit include the following : 5,842,170 titled Method for Editing in Hand Held Recorder ; 5,742,737 titled Method for Recording Voice Messages on Flash Memory in a Hand held Recorder; and  5,491,774 titled Handheld Record and Playback Device with Flash Memory.

The specific products that allegedly infringe on e. Digital's patents include Apple's iPhone, iPhone 3G, iPhone 3GS, iPhone 4, iPhone 4S, and iPhone 5 mobile devices; the Apple iPad series of tablets (excluding the first generation); the Apple iPad mini series of tablets; the Apple iPod Touch series of devices (excluding the first generation); the MacBook Pro series of computers and the MacBook Air series of computers

Going Concern Warnings

According to Wikipedia the company presented a "going concern warning" in their 2009 10-K annual report as follows:

"As discussed in Note 1 to the consolidated financial statements, the Company has historically suffered recurring losses from operations and has a substantial accumulated deficit. This raises substantial doubt about the Company's ability to continue as a going concern. In its 10-K annual statement filed on June 16, 2009, e. Digital made additional disclosures regarding doubt about the company's ability to continue as a going concern."

Fiscal Status

According to  Wikipedia , "Throughout its over 22-year history, e. Digital / Norris Communications continuously lost money. The accumulated deficit at March 31, 2010 was $80 million. Although the company reported its first annual profit for its fiscal year ending March 31, 2009 due to settlements with six of eight defendants of its patent infringement lawsuits which resulted in one-time licensing fees totaling $10.1 million, the company returned to an unprofitable status in fiscal year 2010, posting a net loss of $985,000. Revenue for products totaled $205,000 with service revenue totaling $749,000. Patent infringement settlement income totaled $1,600,000 for total revenue of $2,554,000." It's pretty clear that in order to survive, e. Digital must continue to sue other companies as the numbers presented above clearly indicate that this is their only real money maker.

The patent infringement case presented in today's report was filed in the California Southern District Court, San Diego office. The Presiding Judge in this case is noted as being Judge Michael M. Anello .