Apple hit with $322 million bill in patent dispute over iPhone, iPad chip.

University of Wisconsin-Madison's licensing arm successfully argued that Apple used its patent in its A7 and A8 processors in the iPhone and iPad without permission. Photo: Bloomberg

by Susan Decker

Apple has been told to pay $US234 million ($322m) to the University of Wisconsin-Madison's licensing arm for infringing the school's patent on microprocessor technology.

The amount set by a US federal jury in Madison was less than the $US400 million ($550m) sought by the Wisconsin Alumni Research Foundation. Apple's lawyers argued the amount should be a fraction of the $US110 million ($151m) Intel paid in 2009 to settle an earlier dispute over the same patent.

The dispute concerns the design of a processor chip to improve performance. The foundation argued that Apple refused to pay royalties on its A7 and A8 processors in the iPhone 5s and iPad even after learning of the patent, issued in 1998. A second case, filed in September, focuses on the A9 and A9X processors in newer models of the iPhone and iPad.

The school contends its technology "has been recognized as a major milestone of contemporary computer processors" and led to awards for its inventors.

"This is a case where the hard work of our university researchers and the integrity of patenting and licensing discoveries has prevailed," Carl Gulbrandsen, managing director of the foundation, said in a statement.

Rachel Wolf Tulley, a spokeswoman for Apple, declined to comment on the jury's decision. The company reported $US10.7 billion ($14.7b) in net income in the three months that ended June 27.

Apple will appeal the decision, and has a good track record of getting large verdicts and damage awards overturned.