Washington: Apple Inc. won a patent-infringement ruling that bans some HTC Corp. smartphones from the US starting next year, bolstering efforts to prove that devices running Google Inc.’s Android operating system copy the iPhone.
The US International Trade Commission, in a review of a judge’s findings in July, on Monday said HTC is violating one Apple patent related to data-detection technology and issued a limited import exclusion order that takes effect 19 April.
“HTC will completely remove it from all of our phones soon,” Grace Lei, general counsel for Taoyuan, Taiwan-based HTC, said in an email. The six-member commission determined that three other patents in the case weren’t infringed.
While less than what Apple sought, the ruling gives the company its first victory in patent cases designed to slow the growth of Android, which former chief executive officer Steve Jobs claimed ripped off the iPhone. Apple has one other case against HTC, as well as complaints against Samsung Electronics Co. Ltd and Motorola Mobility Holdings Inc., and is involved in more than a dozen other cases before the trade commission.
The Apple-Android battle is going to continue, said Peter Toren, a patent lawyer with Shulman Rogers in Potomac, Maryland, who has been watching the cases. “I’m not sure this decision, the way it is, is enough to push the parties to settlement. Apple doesn’t have the leverage of a total exclusionary order.”
The list of affected products and a full reason for the commission’s decision, which is subject to appeal and a presidential review, wasn’t immediately made public. Apple’s original complaint named HTC’s Nexus One, Touch Pro, Diamond, Tilt II, Dream, myTouch, Hero and Droid Eris.
Kristin Huguet, a spokeswoman for Cupertino, California-based Apple, declined to discuss the possibility of a settlement. She repeated the firm’s position that competition is healthy, but competitors should create their own original technology.
Representatives from Google had no immediate comment.
HTC shares rose by the 7% daily limit to NT$476 in Taipei after the firm said it will buy back 10 million of its own shares, 1.16% of those outstanding.
The ruling is the first definitive decision in the dozens of patent cases that began to proliferate in 2010 as smartphone makers battle over a market that Strategy Analytics Inc. said increased 44% last quarter from a year earlier to 117 million phones worldwide. HTC, the second largest maker of Android phones, used its partnership with Google to help transform itself from a contract manufacturer founded in 1997 to the biggest US smartphone seller in the third quarter.
HTC generated about $5 billion in US sales last year, according to a separate patent complaint it filed at the trade agency against Apple. That’s more than half of HTC’s $9 billion (NT$275 billion) in global sales last year.
The commission’s order applies to new phone imports and doesn’t force HTC to pull existing devices off US store shelves. The company can import refurbished phones to fulfil warranties or insurance contracts through 19 December 2013. This exemption does not permit HTC to call new devices “refurbished” and to import them as replacements, the commission said.
Apple’s so-called 647 patent covered a feature in which the phone recognizes a telephone number so it can be stored in directories or called without dialing. “The 647 patent is a small user interface experience,” Lei said. “The company is pleased with the commission’s overall decision, and we respect it.”
iPhone 4S, Galaxy
HTC phones accounted for 24% of the US smartphone market in Q3, based on shipments, Palo Alto, California-based researcher Canalys reported on 31 October. Samsung held 21% of the market, and Apple 20%. The market is volatile, and the Apple iPhone 4S that went on sale in October and Samsung’s newest Galaxy phone are likely to change the rankings for Q4.
Apple contended in its complaint that HTC phones infringed four patents. Administrative law judge Carl Charneski in July sided with Apple for two of the patents: the data detection one and the other covering the transmission of multiple types of data. The commission overturned the judge’s findings on that patent, and affirmed his determination that the remaining two patents weren’t infringed, which covered ways software programs are written and executed. The commission chose in September to review Charneski’s findings.
Apple has a second complaint pending before the commission that claims other HTC smartphones and Flyer tablet computers infringe five patents related to software architecture and user interfaces. Apple also has cases before the trade commission and in district courts against Samsung and Motorola, which Google agreed to acquire in August.
The fight can be traced back to a decision by Jobs in March 2010 to file the HTC case, the first patent complaint by a device maker targeting Google’s Android operating system.
Jobs made it his mission to destroy Android, which he said “ripped off the iPhone, wholesale”, according to Walter Isaacson’s biography of the Apple founder. HTC has retaliated with two trade commission cases against Apple, one submitted last year and one in August. HTC lost a preliminary ruling by a judge in the case filed last year, a decision that the commission is now reviewing. The other case has yet to be decided. S3 Graphics Co, a company HTC agreed to buy in July, also has two commission cases against Apple, one of which Apple won last month.
Adam Satariano, Brian Womack and Peter Burrows in San Francisco, Tim Culpan in Taipei and Romaine Bostick in Washington contributed to this story.