Apple/HTC suit signals smartphone patent war

Inside Apple's legal gambit
SAN JOSE, Calif. — Whether Apple can put a chill on iPhone imitators or set a new standard is one of the big questions for the smartphone sector in 2010. In any case, Apple suit against Taiwan smartphone maker HTC filed Tuesday (March 2) is the first shot in what could be the next big mobile patent war over the look and feel of the iPhone, according to a report from Nomura Securities.

Companies including Google, Microsoft, Motorola, Nokia and Sony Ericsson likely will be dragged into the iPhone intellectual property war. The fracas could become larger than the recently settled Qualcomm vs. Broadcom battle that racked legal costs of as much as $300 million a year for Qualcomm, said Richard Windsor, a technology specialist at Nomura Securities.

"Every man and his dog is trying to match the standard set by the iPhone and in the process it looks like many will fall foul of the Apple patent pool filed during the creation of the iPhone," wrote Windsor in his report. "I see the potential for a raft of lawsuits against handset makers and I think that Motorola is most likely to be next in line," he added.

As in all patent infringement suits, counter suits are likely to follow. HTC is a good initial target for Apple because the Taiwan handset maker "has no real meaningful patent portfolio to cross-assert back to Apple," Windsor wrote.

Apple was awarded 289 U.S. patents in 2009, putting it 68 on the list of patent awardees compiled by Wolters Kluwer's IFI Patent Intelligence service. By contrast, HTC ranked 969 with 18 U.S. patents earned in 2009. Motorola was listed as number 57 with 341 patents, and Google came in at 143 with 141 patents.

Other iPhone competitors will be tougher foes. Motorola—like Nokia which has also traded suits with Apple--has a significant portfolio of essential patents on fundamental technologies such as wideband CDMA.

"Nokia has a huge patent portfolio of both standards-based patents and implementation patents and the experience to use them appropriately to create the leverage needed," said Mike Mclean, vice president of professional services at TechInsights, a sister division of EE Times.

Apple has plenty of power to inflict pain, too. The iPhone maker is asserting implementation patents, which gives it an ability to seek an injunction on the import of HTC products, Windsor said. Apple is also claiming wilful infringement which carries a punishment of treble damages.

Apple's focus is clearly on its innovations in the smartphone user interface. Of the 20 patents Apple asserted, "it looks to me like six are low level (OS and kernel) and 14 are based in the user interface," he wrote.

Both Google and Microsoft are indirect targets of the suit. Of the 11 HTC devices cited in the lawsuit five handsets use Google Android and six use Windows Mobile.

"Three of the five Android phones do not contain the Touch sense UI meaning that Apple seems to be asserting against the Android OS itself," Windsor wrote. "Android is licensed under the Apache license which offers no real indemnity against patent infringement," he added.

Suing for features in open source software could raise problematic legal issues, said one expert who asked not to be named.

For example, some users bought Google Nexus One handsets made by HTC that did not have multi-touch interfaces. However, users were later able to get Android updates online that provided the feature.