Wednesday, July 27, 2011

Patent Battle Between HTC and Apple Heating Up

The patent war between Apple and rival smartphone manufacture HTC appears to be heating up. Just a few weeks ago the International Trade Commission handed down a preliminary ruling that HTC violated two of the ten patents Apple accused it of violating.

The ruling was seen as a sever blow for HTC as it clears the way for Apple to block virtually all shipments of HTC Android smart phones into the U.S. Given that Android devices constitute the vast majority of HTC's sales and a large portion of those sales are in the U.S. if Apple could succeed in blocking the company's shipments the loss in revenue would be enough to kill HTC or at least cripple it.

Fast forward to today and things have changed considerably.

A second U.S. International Trade Commission Judge has declared that Apple infringed on intellectual property of S3 Graphics which was recently acquired by HTC. Judge James Gildea's ruling states that while Apple's iPad, iPhone, and iPod lines of mobile gadgets are not in violation of the IP, some of Apple's Mac OS X computers are. This new ruling clears the way for a partial ban on the import of Macs. As virtually all Macs are manufactured outside the U.S., this would be a major blow to Apple's booming computer lineup, which posted in $17.5B USD computer sales last year.

At first glance this ruling doesn't have the same impact as one that found Apple's iPad and iPhone in violation of the IP. However the victory gives HTC substantial leverage to broker a cross-licensing agreement, which could save HTC from a similar import ban on its smart phones.

The ruling now goes before a full six judge ITC panel for confirmation. The full details of the ruling are not yet public, the initial information came via Bloomberg who reported on the case based on early information.

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