International Trade Commission Hands Apple Narrow Victory Over HTC’s Android

LA PatentsSan Diego – The U.S. International Trade Commission (ITC) ruled on Monday, December 21, 2011 that Taiwan-based HTC, who produces the Android smartphone, violated only one provision of Apple’s patents. The ITC ruling imposes an import ban on some of HTC’s products but the ban does not go into effect until April 19, 2012, giving HTC time to modify their products to avoid infringement.

Unfortunately, for Apple, it’s a limited victory. Apple originally filed a complaint in March, 2010 alleging that HTC violated 10 of its patents. In June 2011, at a preliminary hearing, an ITC administrative judge found only two violations of Apple’s patents by HTC. The ITC’s final ruling on Monday further narrowed the preliminary ruling to only one violation.

The Apple patent (US 5,946,647) in question, granted in 1999, contains a feature called “data tapping.” This feature marks up formatted data such as a telephone number in an unstructured document, such as an email, and allows users to bring up other programs (i.e. a dialer app) to process that formatted data. The import ban will not affect HTC products that don’t use this feature or use this feature by another means. For example, Google currently uses this same feature in a different manner without infringing on Apple’s patents. If HTC is able to find a way around this infringement in the time period set by the ITC, this ruling will likely have little effect on HTC. However, if HTC is unable to find a way around this infringement, they will have to remove this infringing feature from their smartphones, putting them at a competitive disadvantage against Apple and other Android vendors.

Either way, this ruling is cause for concern for HTC in the future. While HTC is the second largest vendor of the Android phone, it has less than 20% US market share for smartphones. Further, HTC is considered to be most vulnerable against legal attack because they have a small patent portfolio to act as a potential shield. Apple may find credence in this ruling that the Android phone infringes on its patents and pursue further legal action against HTC and other Android vendors.

At present, the best legal and financial tactic for Apple has been to pursue legal matters in the ITC where they can prevent import of infringing products and disrupt the finances of an infringing company. The ITC has been the more desired route to pursue legal matters because the process has been considered more efficient and the threat of an importation ban has resulted in forcing companies to settle. Before his death in October, 2011, then Apple-CEO Steve Jobs referring to this case, stated, “we think competition is healthy, but competitors should create their own original technology, not steal ours.”




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