Apple v. HTC: Who's on First, Who's at Risk?

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With the flack over Apple's claims that much of the sexiest smartphone tech falls under its patents, our Carl Weinschenk looks at the best mobile tech on the market today.

Apple's patent infringement suit against HTC is getting a lot of ink these days. We all have opinions on Apple's real motives, who the actual stakeholders are, what the outcome will be, and how that will affect the mobile phone industry. It's a lot of information to digest, so I thought a round-up of sorts might be helpful.


Though I won't be so naive as to predict how the court will rule, if it goes the way Apple hopes it does, the Cupertino, Calif.-based company could very well be untouchable in the mobile phone world.


Apple filed suit against the Tawainese handset maker at the beginning of March. The suit, filed in both a federal district court in Delaware and the International Trade Commission, alleges that HTC products infringe 20 different hardware and software patents on technology related to the iPhone.


The action came roughly a year after Apple COO Tim Cook told reporters, "We will not stand for having our [intellectual property] ripped off.." At the time, most thought the comment was directed at Palm's Pre, but obviously it was intended for a wider audience. When the suit was filed, CEO Steve Jobs essentially echoed Cook's earlier comment. Jobs said:

We think competition is healthy, but competitors should create their own original technology and not steal ours.

Though the pleadings do not specify which HTC products infringe which Apple patents, the general consensus is that the HTC-Google collaboration Nexus One is the target. A day after the lawsuit was filed, statistics indicated that the iPhone has lost mobile market share to Android-based phones like the Nexus One.


The fact that Google issued a statement in support of HTC before HTC even commented on the lawsuit also lends credence to the idea that Apple is actually gunning for Google here. On the same day the news of the lawsuit broke, Engadget's Nilay Patel relayed this "short but sweet statement" from Google:

We are not a party to this lawsuit. However, we stand behind our Android operating system and the partners who have helped us to develop it.

Patel wondered whether that meant Google might help bankroll HTC's defense.


Just this week, HTC issued its own response to the suit. In a statement on the company Web site, CEO Peter Chou vowed the handset maker will fight back. He said:

HTC disagrees with Apple's actions and will fully defend itself. HTC strongly advocates intellectual property protection and will continue to respect other innovators and their technologies as we have always done, but we will continue to embrace competition through our own innovation as a healthy way for consumers to get the best mobile experience possible.

Whether or not Apple is aiming for a precedent it can use to systematically go after other players in the mobile phone space, the lawsuit and its possible outcomes are already impacting the market. Oppenheimer's Yair Reiner told clients recently that several top mobile phone makers have sent their device designs back to engineering as a result of the litigation.


In terms of possible outcomes, there are, of course, two extremes. One one hand, Apple could prevail on none of its claims. If that were to happen, other mobile phone hardware and software makers would no doubt see the iPhone and all of its underlying software and hardware as fair game for cloning. On the other, Apple could win on all of its claims. This would serve to stop Apple's competitors in their tracks, and force all of them to come to some sort of agreement with Apple or take their competing devices off the market.


The actual outcome is likely to fall somewhere between the two extremes, but eWEEK's Don Reisinger says even if Apple prevails on some of its claims, the mobile phone industry will be forever changed -- and not for the better.


He says an Apple victory will give the company the legal precedent it needs to go after any other company whose designs might possibly infringe these patents. Everyone from Google to Microsoft and Research in Motion would be at risk, Resinger says.


Moreover, highly desirable features, such as touch screen unlock, browser interaction, and screen shutoff, could conceivably be beyond the reach of Apple competitors if its patents are upheld. Such a decision, in Reisinger's view, would set back the entire mobile phone industry.