Apple iPhone 4s. Photo: Diego M. Radzinschi/ALM

A federal judge in San Jose, California, has turned back Apple Inc.’s bid to knock out a class action lawsuit brought on behalf of iPhone 4 and iPhone 4S owners who lost the ability to use the FaceTime feature to make video calls.

Plaintiffs claim their phones don’t have sufficient capacity to run the latest versions of Apple’s iOS operating system and that the company intentionally disabled the FaceTime function on older versions in April 2014. Apple and its lawyers at Kirkland & Ellis, however, argued the plaintiffs failed to allege sufficient harm to establish standing with the loss of functionality.

In a 28-page order issued July 28, U.S. District Judge Lucy Koh of the Northern District of California found the plaintiffs sufficiently pleaded their now FaceTime-less phones lost value.

“Plaintiffs allege that Apple disabled FaceTime on iOS6 and earlier operating systems in order to save money, that Apple knew that iPhone 4 and 4S users who operated iOS6 and earlier operating systems would be ‘basically screwed’ as a result of Apple’s disabling of FaceTime, and that plaintiffs suffered harm from Apple’s disabling of FaceTime in the form of a diminution in value of their iPhones,” Koh wrote. Those allegations, the judge said, were sufficient to allow the plaintiffs’ claims of trespass to chattels and violation of California’s Unfair Competition Law to move forward.

The FaceTime dilemma for older iPhone users arose in the wake of an intellectual property setback for Apple. In November 2012, an East Texas jury found one of the methods Apple used to connect FaceTime calls—using a so-called “peer-to-peer” connection—infringed patents owned by VirnetX Inc. After the verdict, Apple began connecting all FaceTime calls via a separate method that used a third-party server to relay calls from device to device. But paying for the new method quickly ran up a $3.2 million bill for server space, according to internal Apple emails. Apple hoped to squelch those costs when it introduced iOS7 in September 2013. The new operating system included a new peer-to-peer method for connecting FaceTime calls that Apple believed didn’t infringe the VirnetX patent.

But the demands of the new software put owners of iPhone 4 and iPhone 4S models in something of a Catch-22, according to plaintiffs: Update their software and risk the basic functionality of their phones, which would “buckle under the weight of the new software,” or stay with the old version of the software and have no access to FaceTime.

In the July 28 order, Koh found that the “continued unavailability of FaceTime” made the case different from others involving temporary interruptions and errors in services that courts have dismissed.

“Plaintiffs allege that FaceTime was heavily advertised by Apple as a function of the iPhone 4, that FaceTime played a ‘prominent role in the lives of Apple users,’ and that plaintiffs themselves used FaceTime on a daily basis to communicate with family members,” she wrote.

Bruce Simon of Pearson, Simon & Warshaw, one of the lead lawyers for the plaintiffs, didn’t immediately return a message left with his assistant Monday morning. Elizabeth Deeley of Kirkland & Ellis, who represents Apple, didn’t respond to an email message.