A $533 million jury verdict that would have been the largest ever for a "patent assertion entity" has been struck down four months after a jury granted it.

US District Judge Rodney Gilstrap, who oversaw the case against Apple, has ruled (PDF) that the damages verdict must be thrown out because of a faulty instruction to the jury. He has ordered a new trial to be held solely on the issue of damages.

Gilstrap said the jury was instructed about the "entire market value rule" of patent damages, even though Smartflash didn't apply that model in its case.

"[T]he confusion created by the instruction noted above warrants a new trial on damages in this case," Gilstrap wrote in the order, published yesterday. "The Court is persuaded, in the clarity of post-trial hindsight, that such instruction may have created a skewed damages horizon for the jury."

The judge also expressed concern about a consumer survey Smartflash used in its damage model but wrote, "At this time, the Court does not comment on the sufficiency of Smartflash's survey questions."

In a separate order (PDF), Gilstrap ruled that Apple's infringement isn't willful, despite the jury's finding otherwise. During trial, Smartflash lawyers grilled Apple Senior Director Augustin Farrugia, who met with the Smartflash inventor back in 2000 before he worked at Apple. "[T]he Court finds nothing in his testimony which even approximates the clear and convincing evidence necessary to establish willfulness," Gilstrap wrote.

Smartflash has no employees, but it occupies a small office in Tyler, Texas, the same East Texas city in which it files its lawsuits. Its founder, a British man named Patrick Racz, tried to push his product out as an early digital media player, but it never took off. By 2002, the business was gone except for its patents. Racz used three patents related to downloading digital content, numbers 7,334,720, 8,118,221, and 8,336,772, to sue Apple.

Racz lives on the Isle of Jersey, and today he's focused on managing his litigation and getting more patents, his lawyer Brad Caldwell told Ars in interviews after the verdict. Caldwell strenuously denies the idea that his client is a "patent troll."

"You have the inventor who came up with the idea, disclosed it to the public in a patent application to advance the state of the art, and spent 15 years staying involved as the main figure who always believed in his idea," Caldwell said.

Smartflash has patent lawsuits pending in the same venue against Google, Amazon, and Samsung as well.

The massive verdict came just as debate was heating up on a new patent reform bill, and Apple did not let the verdict go unnoticed. "Smartflash makes no products, has no employees, creates no jobs, [and] has no US presence," Apple said in a statement after the verdict. "This case is one more example of why we feel so strongly Congress should enact meaningful patent reform."

On February 25, the day after the verdict, Smartflash filed a second lawsuit against Apple, asserting its digital download patents against newer products including the iPhone 6 and 6 Plus, and iPad Air 2.