[ NNSquad ] Re: [IP] Nuclear War' in Patent Fight With HTC -- you can't run that App

Is this the Apple app-store imposed on the world?

IANAL. But perhaps some lawyers on the list can tell me what happens if HTC ships a phone with hardware capable of multi-touch but third parties use the feature in applications. Who is violating a patent and what can Apple do about it?

How general are these patents? Can one patent the concept of using gestures to unlock a device. The paperclip and its variants have been a classic example of patents. With software are locking out whole swaths of possibilities because software is so flexible?

IANAL so I can ask – is the Piano a multi-touch device?

-----Original Message-----
From: David Farber [mailto:dave@farber.net]
Sent: Wednesday, March 03, 2010 16:32
To: ip
Subject: [IP] uclear War’ in Patent Fight With HTC

Begin forwarded message:

From: "CONNIE GUGLIELMO, BLOOMBERG/ NEWSROOM:" <cguglielmo1@bloomberg.net>

Date: March 3, 2010 4:15:45 PM EST

To: dave@farber.net

Subject: (BN) Apple Starts ‘Nuclear War’ in Patent Fight With HTC

fyi

+------------------------------------------------------------------------------+

Apple Starts ‘Nuclear War’ in Patent Fight With HTC (Update3)

2010-03-03 21:13:22.471 GMT

(Updates share price in 20th paragraph.)

By Susan Decker and Connie Guglielmo

March 3 (Bloomberg) -- When Steve Jobs unveiled the iPhone

in 2007, he said Apple Inc. had applied for more than 200

patents for the device and was ready to enforce them. Now, Apple

is putting those words into action.

Apple filed a patent-infringement complaint against

Taiwan’s HTC Corp. yesterday, seeking to prevent U.S. imports of

phones that run Google Inc.’s Android operating system. The

decision to take the case to the International Trade Commission

signals that Apple wants to curb HTC’s market share gains as

quickly as possible, said Lyle Vander Schaaf, a patent lawyer

with Bryan Cave LLP in Washington.

“It’s like nuclear war,” said Schaaf, who specializes in

cases before the ITC in Washington, where Apple filed complaints

over 10 patents. “If you really want to have an effective

remedy to protect your rights, you go to the ITC. Once you’re

there, there’s no going back.”

The ITC can act more quickly than a court, and its power to

ban imports is often more important in a rivalry than the cash

damages possible in a civil case. Apple also filed a patent suit

in federal court in Wilmington, Delaware, claiming infringement

of 10 additional patents, including one for technology that lets

people work the iPhone by touching the screen with two fingers.

$13 Billion Phone

HTC dropped 2 percent to close at NT$323.5 on the Taiwan

Stock Exchange, the biggest decline since Feb. 8. The island’s

benchmark stock index rose. The stock has lost 12 percent this

year, compared with the 6.8 percent drop in the Taiex index.

Apple generated $13 billion in sales from the iPhone in the

year ended in September, accounting for 30 percent of total

revenue. Industrywide smartphone shipments are expected to

increase 46 percent this year, according to market research firm

Gartner Inc. Overall handset sales will rise 11 percent to 13

percent.

“We can sit by and watch competitors steal our patented

inventions, or we can do something about it,” Jobs, 55, said

yesterday in a statement. “We’ve decided to do something about

it.”

Apple, based in Cupertino, California, isn’t commenting

beyond the statement yesterday, said Steve Dowling, a company

spokesman.

Google says it isn’t a party in either case. “However, we

stand behind our Android operating system and the partners who

have helped us to develop it,” the Mountain View, California-

based company said.

Apple vs. Nokia

Apple and Nokia Oyj, the world’s biggest handset maker,

have each filed ITC complaints seeking to block imports of the

other company’s phones. In addition, in a Delaware suit filed by

Nokia, Apple has accused Nokia of trying to strong-arm a

licensing deal for Apple patents. Apple has said it doesn’t want

to license its patents.

“We’re certainly not in the business of licensing good

ideas,” Tim Cook, Apple’s chief operating officer, said at a

shareholder meeting Feb. 25. “That’s not why we’re here. That’s

not what our business is about.”

The ITC handles a variety of patent cases, from foldable

stools made in China to a dispute over the hybrid engine in

Toyota Motor Corp. vehicles. It has also become a key venue for

high-stakes technology disputes over computer chips and

electronics.

Samsung Electronics Co. and Sharp Corp. had each won orders

to block imports of liquid-crystal display televisions made by

the other company, before they settled their dispute. Nvidia

Corp. is challenging a judge’s finding from January that its

computer-graphics chips infringe patents owned by designer

Rambus Inc.

Multitouch Feature

Yesterday’s ITC case involves how operating systems work on

mobile phones, while the Delaware suit includes the multitouch

patent. Multitouch lets people work the iPhone by touching the

screen with two fingers and making swiping motions, allowing

them to quickly enlarge or shrink photos or Web pages.

Multitouch is one of the 10 patents asserted against HTC in the

civil suit.

One of the other patents in the civil case is for a way of

using a specific gesture to unlock a touch screen as an

alternative to a password. Others are for inventions related to

the movement of icons, managing power and sensors to detect user

activity.

Validity of Claims

“We have not yet had the opportunity to investigate the

filings,” Linda Mills, a spokeswoman for Taoyuan, Taiwan-based

HTC, said in an e-mail. “Until we have had this opportunity, we

are unable to comment on the validity of the claims being

made.”

Apple was granted 289 patents in 2009, up from 186 in 2008,

according to IFI Patent Intelligence, a unit of Wolters Kluwer

NV, Europe’s biggest tax and legal publisher. That’s less than

the 648 that Nokia was awarded last year, based on an IFI

analysis. Still, quantity doesn’t always matter -- all it takes

is one patent to persuade the ITC to issue an exclusion order.

In 2007, the agency ordered a halt to tens of millions of

mobile-phone imports because Qualcomm Inc. chips inside them

infringed a Broadcom Corp. patent for a battery-saving feature.

The ban never went into effect, and was later overturned because

phone manufacturers didn’t have the chance to take part in the

legal process.

“The commission has already showed they were brave enough

to block a multimillion-dollar product from the U.S. market,”

Schaaf said. By contrast, judges in district courts often force

parties to settle because of the complexity of cases, he said.

Apple gained 48 cents to $209.33 at 4 p.m. New York time in

Nasdaq Stock Market trading. The stock has more than doubled in

the past 12 months.

Market Share

HTC’s global market share rose to 6.9 percent of smartphone

sales last year from 6 percent in 2008, according to Gartner.

That made its phones the fourth most popular. Apple, in third

place, increased its share to 16.1 percent of the market from

10.7 percent. Research In Motion Ltd.’s share was unchanged,

while Nokia, the No. 1 smartphone maker, lost ground.

Nokia started the fight with Apple, filing suit in October

when the two companies were unable to reach a licensing

agreement. Espoo, Finland-based Nokia is trying to maintain

market share amid competition from Apple and RIM, maker of the

BlackBerry.

“You’ve got the ‘smartest kids on the block’ attitude and

some of it is quite well deserved,” said Robert Yoches, a

patent lawyer with Finnegan Henderson in Washington who’s been

following the cases. “They also feel that this is the way to

hold onto market share. Even if they can’t keep someone out,

they can keep some competitive features out.”

The Delaware case is Apple Inc. v. HTC Corp., U.S. District

Court, District of Delaware (Wilmington). The ITC complaint is

In the Matter Of Certain Personal Data and Mobile Communications

Devices and Related Software, Complaint No. 2715, U.S.

International Trade Commission (Washington).

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