Apple’s Smartphone Patent Win Over HTC to Be Reviewed by U.S. Trade Agency

By Susan Decker - Sep 16, 2011 7:08 AM GMT+0700

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The HTC Thunderbolt is displayed at the 2011 International Consumer Electronics Show in Las Vegas. HTC, Asia’s second-biggest maker of smartphones, has said that no matter the outcome, there are “alternate solutions in place” to work around the patents. Photographer: Andrew Harrer/Bloomberg

A U.S. trade agency said it will review a judge’s finding that HTC Corp. (2498) infringed two Apple Inc. (AAPL) patents, a decision that could lead to a ban of HTC’s Android- based phones in the country.

An ITC judge determined July 15 that HTC’s Android-based smartphones infringed two Apple patents, while no violation occurred for two others. The six-member commission will review infringement and validity on all four patents and whether a correct interpretation was made on terms within three of the patents, according to a notice yesterday on the ITC’s website.

Apple, the world’s biggest smartphone maker, has accused Taoyuan, Taiwan-based HTC of “stealing” its iPhone and iPad technology and using it in devices that run Google Inc. (GOOG)’s Android operating system. HTC, Asia’s second-biggest maker of smartphones, has said that no matter the outcome, there are “alternate solutions in place” to work around the patents.

The two patents HTC was found to have infringed cover transmission of multiple types of data and a system that can identify phone numbers in an e-mail in a way that lets the user dial or store that number. The two patents that the judge said weren’t infringed relate to object-oriented programming, a way of writing and executing software.

HTC is pleased with the decision to review the judge’s finding “and we are confident in our case,” Adam Emery, an HTC spokesman, said in an e-mailed statement. Kristin Huguet, a spokeswoman for Cupertino, California-based Apple, declined to comment.

The ITC is a quasi-judicial agency in Washington than can block imports of products found to infringe U.S. patents.

Dec. 6 Deadline

Apple had argued in an ITC filing that if the commission opted to review the patents that were infringed, the agency also should consider the two that were found to not be infringed.

Apple has another commission complaint pending, filed in July, that also targets HTC’s phones and Flyer tablets. HTC has retaliated with three patent-infringement cases against Apple, one submitted last year, one last month and another last week.

In addition to the review of infringement, validity and interpretation topics, the commission said it will also consider whether Apple had fulfilled a requirement that the company show it was using the inventions in two of the patents. Both HTC and Apple were told to submit arguments on five additional questions as well. The ITC is scheduled to complete the investigation by Dec. 6, according to a timeline on its website.

Espoo, Finland-based Nokia Oyj (NOK1V), which had been targeted in the same ITC complaint, reached a settlement with Apple in June. Mountain View, California-based Google wasn’t a party in the case.

Public Interest

HTC said in an Aug. 25 filing that even if it did infringe the patents, the commission shouldn’t ban U.S. imports of the company’s phones. A ban wouldn’t be in the public interest partly because HTC phones have special features for the hearing impaired, comply with requirements for “enhanced 911” location services and provide Emergency Alert Services.

About 36 percent of Android smartphones in use in the U.S. were made by HTC, according to the filing.

“The exclusion of HTC accused devices from the U.S. market would not only eliminate the most popular brand of smartphones using Android, the fastest-growing mobile operating system, but would also impact the public health, safety, and welfare concerns of individual U.S. consumers,” HTC said.

Apple said in an Aug. 25 filing there is no shortage of smartphones on the market and HTC could replace lost Android sales with phones the company makes using Microsoft Corp.’s Windows Phone operating system.

The case is In the Matter Of Certain Personal Data and Mobile Communications Devices and Related Software, 337-710, U.S. International Trade Commission (Washington).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net