Apple wins HTC patent infringement case

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A customer examines an HTC Corp. Rhyme mobile handset device at an HTC store in Taipei on Dec. 14, 2011. Photographer: Ashley Pon/Bloomberg

The International Trade Commission found that HTC infringed on one patent held by the California technology giant. As a result, the Taiwanese company is slapped with a ban from sellingall HTC phones covered under the infringed patentfrom 19 April,2012.

Apple, being one of the strongest players in the technology market, is fighting numerous legal battles with global giants over technology rights. The Cupertino-based company claimed that HTC was ignoring 10 of its patents.

Reuters reported that HTC claimed the impact will be limited as only one patent and not 10 as claimed.”We are very pleased with the determination and we respect it,” HTC said in a statement.

IMMINENT BAN

HTC said the patent in question was all about a small user-interface feature called “data tapping” which allows users to grab embedded information and would discard it very soon from all of its handsets.

ITC upheld the findings of patent complaint in March 2010 by Apple against HTC that it has infringed in 647 patent & “263patent.The 647 patent describes a “system and method for performing an action on a structure in a computer” while patent 263 refers to a “real-time signal processing system for serially transmitted data.

ITC will impose a ban on some of HTC’s smart phones on 19 April, 2012 to give a transition period for US carriers, according to a notice on its website.

Jayesh Easwaramony from Frost & Sullivan said they see a very minimal impact of this as there could be a workaround for the same technology that HTC can implement in the next four months.

HTC, being one of the fourth largest in manufacturing smart phones, uses Googles Android operating system for most of its phonesand has recently launched Microsofts Windows Phone 7 software.

Apple is embattled with various mobile phone companies in patent disputes across Europe, Asia, South Korea and Australia who run Android OS on their handsets.

BACKLASH

David Chen, a senior analyst at Taipei based Market Intelligence and Consulting Institute (MIC), in a recent interview with CNA said: “HTC has slashed its fourth-quarter revenue guidance and its positioning in China market, seems like they were preparing for possible loss in this case.

“China as a mid-and low priced smartphone market cannot make up to HTCs loss and if suffers a sales ban in United States, it cant cope up with the loss, he added.

Developing a self-owned operating system, such as Samsungs Bada OS, could partly ease Android makers pressure from rival Apple, but this may cause uncertainties for HTC, said Joey Yen, senior analyst at International Data Corp (IDC).

“Self-owned operating systems allow room for imagination, but are dependent on a company’s strength,” Yen explained.

“HTC may not have enough manpower or capital to develop one since it has put a lot of resources into the Android and Windows platforms.”

But Peter Chou, HTC CEO, reiterated his company is not interested in having its own operating system and will stick to the Android and Windows platforms.

Many HTCs component makers are conservative about the outlook of fourth quarter of the year. said Yen based on the information from the smart phone.

The ITC ruled 17 Oct. in another case that Apple had not violated HTC’s four patents related to technologies for power management and phone dialling.

On Nov. 22, the ITC announced that Apple’s Mac OS X system had not infringed on texture compression patents held by S3, pushing HTC to review its US$300 million acquisition of the U.S. graphic chipset designer in July.

Bonnie Chang ,Yuanta Securities Analyst, said: “I have a negative and bearish view (on HTC). I expect its first quarter will still not be good because US phone operators will worry about the injunction and will not pull in inventory until HTCs new models are approved.

WAY OUT

Analysts believe the new phones have to prove competitive enough to regain market share because rivals Samsung and Motorola Mobility are selling very well in the fourth quarter.

Hoping that the tug of war between the Smartphone companies will come up with new innovations and technologies in the market at its best to compete with each other. The customers like me are sure are looking forward for some good phones with numerous applications and vast technology, an analyst at IDC noted.

HTC is battling Apple at the courts and is totally defenceless except for S3 graphics, which is the faintest light in the dark tunnel. Analysts are hoping that HTC will seek to clear the infringement charges and seek a compromise with Apple within due course of time.

(Written by Manasa Kesiraju; Edited by Moign Khawaja)

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