ITC Disallows Use of Google Patents in HTC vs. Apple Dispute
By Mark Long / Mobile Tech Today. Updated June 12, 2012.
A judge at the U.S. International Trade Commission has ruled that HTC will not be able to use five patents that the Taiwan-based smartphone maker obtained from Google as part of its pending complaint that Apple's iPhone violates the company's intellectual property rights.
ITC administrative law Judge Thomas Pender agreed with Apple's motion that HTC lacks the right to sue based on Google's former patents, HTC still has three other patents that it is seeking to use in its dispute before the ITC.
Pender "apparently concluded that HTC failed to acquire all substantial rights in the relevant patents," said FOSS Patents blogger Florian Mueller on Monday. "As a result, only three of eight patents remain in HTC's second ITC action against Apple."
HTC has the option of appealing Pender's decision before the full ITC, but Mueller said such appeals rarely succeed at this stage of an investigation.
"It's theoretically possible that Google could solve the problem by joining the investigation as an additional complainant," Mueller wrote. "If Google decided to join the investigation, this could result in further escalation between Apple and Google."
Too Little, Too Late
Mueller regards Pender's decision as "an embarrassment for Google" given that the developer of Android waited nearly "a year and a half after Apple's first patent lawsuits against HTC" before providing support that turned out to be a case of "too little, too late."
"If Google had assigned all substantial rights to HTC by truly transferring those patents to the Taiwanese company -- as opposed to imposing limitations and restrictions -- Apple's motion wouldn't have succeeded," Mueller said. "But Google's support for the Android ecosystem has clear limits."
HTC's complaint was filed in the wake of an ITC ruling late last year in favor of Apple under which HTC was prohibited from shipping handsets into the United States containing technology that violated Apple patents. Though HTC has since implemented a workaround to prevent any hiatus in its U.S. shipments, last week Apple filed another complaint alleging that HTC's solution does not bring the Taiwan-based company's devices into compliance with the ITC's December 2011 decision.
Mueller believes Pender's decision has implications beyond this particular ITC investigation. "Google isn't the only patent holder that assigns patents to other companies for the purpose of suing third parties," Mueller said in his blog.
U.S. Market Struggles
Last week, HTC lowered its prior revenue forecast "due to lower than anticipated sales to Europe, and the delayed shipment and launch of certain products in the U.S." The Taiwan-based handset maker also confirmed that the ITC has launched a separate investigation of several patent infringements filed by Nokia against HTC.
HTC held the fifth position in global smartphone shipments in the first quarter of this year by shipping 6.9 million units, according to IDC. However, the Taiwan-based company's struggles in the U.S. market once again negatively affected its overall performance, IDC's analysts said.
"HTC in North America claimed 4.8 percent share in the quarter -- good for sixth [place] overall," said IDC Senior Research Analyst Kevin Restivo in an e-mail Tuesday.
Still, HTC maintained its No. 5 position among the world's top smartphone vendors, due to its relatively strong performance in the Asia/Pacific region. "The company is staking future success in large part on its One X and S products," IDC analysts said.
According to ABI Research, HTC has admitted that it will be looking toward China for future growth. The Taiwan-based handset vendor also expects to be "developing its own custom application processors for the low-cost smartphones that are expected to drive this market," the analysts at ABI Research said.