Will Apple play hardball with HTC in patent battle?

“Patent battles are hard to price. As Samsung faces its second patent setback in a week after a German court ruled to block its “Galaxy Tab” tablet computer from being sold in parts of Europe, investors in upstart Taiwanese smart-phone maker HTC will surely be feeling a bit anxious about the company’s patent litigation battle with Apple as the two jockey for market share in the U.S.,” Paul Mozur blogs for The Wall Street Journal.

“HTC has repeatedly stated that the current litigation will have minimal impact on its business operations. But investors have been less sure and HTC shares have fallen 24.2% since July 4th,” Mozur writes. “For now, the trouble in assessing litigation risks stems from an inability to determine how punitive Apple will actually be if it wins a final ruling, expected to be made by the U.S. International Trade Commission in December, that HTC infringed on two of its patents having to do with the recognition and storage of email addresses and phone numbers. HTC lost a preliminary ruling on those patents on July 15.”

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“Quite a few analysts believe Apple and HTC might come to a cross-licensing agreement that will cost HTC a fixed sum per handset. HTC has most likely already made provisions for such a settlement, these analysts say, and it would be unlikely to do excessive long-term damage to the company. Still, estimates for how much an agreement might cost HTC range widely, from less than US$5 per handset to US$13,” Mozur writes. “Some patent lawyers are less certain that Apple will so readily sign away the rights to prized intellectual property. Apple doesn’t need the extra revenue it would get from HTC, the argument goes, and realizes it is far better to fight off Android’s growing market share by stripping out capabilities and slowing innovation and product releases via litigation.”

MacDailyNews Take: Apple wouldn’t be slowing innovation. Google is free to innovate with Android. Apple is merely protecting their own property. IP theft is not innovation.

Read more in the full article here.
 

43 Comments

    1. I just read 15 comments from the dumbest people in the world. clearly, none of you know WTF you’re talking about.

      Apple is seeking to rid itself of competition through litigation instead of innovation.

      smart phones, tablets, mobile apps and mobile app stores have been around long before apple was a household name. they are laying claim to tons of shit that they did not invent.

      they’ve taken the ideas of others, re branded it as their own and now they want to sue anybody whose makes products more popular than theirs.

      Android OS, smart phones and tablets have taken the world by storm. in just 2 years it has come from nowhere to be THE market leader and Steve Jobs’ ego cant handle that.

      1. Sounds like the spew of sour grapes from a fragtardroid user…. Fragdroid may have been around 2 years, but the so called ‘take the world by storm’ sales numbers didn’t happen until the last 4-6 months of buy one for really cheap and take home a 2nd POS for free.

        The only real numbers that anyone worries about is Apple has 70% + of the smart phone market profits. Maybe fragdroid can make it up in volume with a buy one and get 2 free promo.

        Sorry Jon, go troll under another bridge somewhere else.

      2. They certainly lead the bottom end of the market, so congratulations for apparently choosing to identify yourself with that crowd.

        To paraphrase the immortal words of Cartman, “I guess I’m just not poor and stupid enough to own an Android phone”.

      3. Jon, your argument is weak.

        Android phones are like weeds. New ones popping out like crazy. Many of them die off but more grow from their seeds. They come in different varieties and most look like bad iPhone clones.

        It isn’t about market share. It’s easy to capture market share by flooding the market with junk and that is what all the Android device makers are good at doing.

        Look at the smartphone market before the iPhone and explain to everyone why the entire industry changed right after the iPhone was released? What did Apple copy if there was nothing like it before?

        Apple plays fair and they pay up for patent licenses they don’t own but the stuff they did work hard on, you bet they will defend especially if someone else is using it without paying. Stealing is stealing and Apple won’t accept that.

        1. Very True!!
          HTC is just following Apple’s step to become successful. They never invent anything and they are suing the company over the product that they copy from? (what a joke) This is so wrong!! I’m from Taiwan, but what HTC is doing is totally wrong! Google even come up with “rent-a-patent” stuff to help HTC fight Apple.

          I think the whole patent lawsuit should change to: if you did not invent the patent, then you don’t own it. If the company went out of business, then the patent is no longer valid. If the company got merged by others, then the patent is no longer valid, too…..

          As for others that are arguing if Apple win the lawsuit, then there will be no competition for new innovation. But look what is going on right now, Apple is the only company who are innovated. All others such as HTC, Samsung, are just competing with Apple by copy and making similar product, but “NOT INVENTING” new product. So, bottom line is, without HTC or other competitors, Apple is still going to come up with new technology and new product!!

          Apple should win the lawsuit and HTC should be penalized!!

      4. Well if, as you believe, nothing was infringed upon, then Apple’s litigation will fail and Android manufacturers have nothing to worry about. Right?

        Or are you seriously suggesting that every court in the world is slanted in Microsoft and Apple’s favor?

      5. Well, that’s not an inflammatory statement, Jon Garrett. Let’s examine.

        First, “…smart phones, tablets, mobile apps and mobile app stores have been around long before apple was a household name.” Well, certain aspects of those devices/functions *have* been around, but that does not obviate the fact that Apple brought something new to the table. After all, with the exception of some Palm and RIM devices, none of those devices/functions were that successful. And even Palm and RIM devices as only semi-smart, at best.

        “Android has taken the world by storm.” Android has been far less successful in the rest of the world than in the U.S. where the iPhone (until this year) was limited to a single carrier. Android is also targeting the lower end of the market, taking market share away from Symbian and other has-beens because it is “free” to the vendors (so far). It is instructive to note that the addition of a second U.S. carrier for the iPhone 4 has had a marked and sustained impact on Android.

        Lastly, popularity is not necessarily a measure of success for people, devices, or an OS). And, if the Android OS that you so love was built on stolen IP as claimed by many, then it won’t be “free” anymore. Note that it was never truly free, anyway – it always included a hidden Google tax.

        Based on the history of Apple and the many things that were said and printed over the years, I have no doubt that SJ’s ego can handle a lot. He also has a habit of coming out on top in the end. I think that I will let Apple’s performance speak for itself, Jon Garrett. Let’s revisit this in a year or two…

      6. Recent reports indicate that Apple sells more smart phones than any individual Android manufacturer. Also that Apple’s net profit from smart phone (iPhone) sales is greater than the net profit of a all Android manufacturers from smart phone sales.

        Put all of that in your pipe and smoke it.

      7. You may like to see what Android look like before Apple released the iPhone. Look a lot like the Blackberry. After the iPhone Googles Android innovation was to produce a version that looked like the iPhone. Not much effort to copy. But, back up the thieves and ask them to release their IP on the search engine. See how that goes.

      8. “Apple is seeking to rid itself of competition through litigation instead of innovation.”

        lol, bullshit. It’s impossible to compete through innovation when everybody else copies your innovations as soon as you make them. So right there your premise is false.

        For all of its existence, Apple has been forced to compete based on other factors. Like ease of use, stability, and hardware quality. They’ve apparently gotten really sick of their innovations having no competitive impact thanks to the slavish rip-offs of their products instantly churned out by copycats, though, and they are finally laying down the smack.

        About time.

        In response, HTC, Google, et. al. are fighting tooth and nail so that they can keep copying Apple instead of being forced to innovate, which they are seemingly incapable of doing.

        “smart phones, tablets, mobile apps and mobile app stores have been around long before apple was a household name”

        Okay, that’s some of the funniest revisionist history I’ve ever read. Yes, Jon, smartphones, tablets PCs, mobile apps, and app stores were all around long before the fucking 1980’s. You totally schooled us just now.

        “they are laying claim to tons of shit that they did not invent … they’ve taken the ideas of others, re branded it as their own”

        You just described Google and its Android hardware partners perfectly.

        “now they want to sue anybody whose makes products more popular than theirs.”

        Hahaha, what? Okay, name one HTC product that’s even remotely close to being as popular as the iPhone or iPad. 1, 2, 3, GO!

        “Android OS, smart phones and tablets have taken the world by storm.”

        On what planet? Android tablets have failed hideously, while on the smartphone front it became the defacto operating system offered by manufacturers and carriers because it was free, which is the reason it proliferated. Not because people adore it. Now that it’s no longer free to license and getting less free by the minute, it’s basically a goner. Once the carriers and manufactures find a cheaper and/or less patent infringing alternative, they’ll drop Android like a hot potato. Much to the complete apathy of consumers.

        It’s an also-ran nearing its finish line.

  1. The iPad is a paradigm changer that will carry Apple to #1 in any metric of computer, OS market share.

    Apple may be the largest public Company in the world by market capitalization, but that will be nothing when Apple also has share dominance.

    There won’t be IP licensing until at least 2015. After that it won’t matter.

    1. Apple doesn’t want to dominate any part of the mobile market on purpose. They’re happy with a share between 30-40%. Anything more & they’ll be accused of trying to monopolize the industry, like what happened to Microsoft with Windows.

      1. You’re probably right and that’s very sad. It means the best product can’t win, because otherwise government will punish them.

        The reality, of course, is that all the monopolies and near monopolies that exist are government created: Government gave cable a monopoly on local wired TV, gave the cell companies a triopoly to protect them from competition, using its monopoly on spectrum, etc.

        The only thing anti-competitive in society is government, which has its monopoly held via an occupying army.

  2. The last thing I believe Apple is looking for is monetary compensation. Unlike Microsoft where imposing licensing costs on Android will drive handset manufacturers to adopt Windows Phone 7, Apple doesn’t fall in this category. Apple has no wish to drive handset manufacturers to the iOS fold.

    It is likely that Apple will ask for a combination of licensing fees and excision of the infringing parts from the Android software and/or make HTC design their handsets with visual cues that give sufficient differentiation from the iPhone so as not to give manufacturers a free ride on Apple’s superior design aesthetics. 

  3. Keep in mind that if Apple offers licensing to one person, it has to do so on similar terms to others who wish to license the IP. That means Apple may have a very strong disincentive to license its IP to anyone, choosing to keep it to itself and block HTC, Samsung, etc. from selling their products with infringing features.

    And let’s face it, a smartphone that can’t store your email addresses or phone numbers isn’t going to be a hit with consumers, even with Angry Birds on it.

    1. That’s not true. They have never said that they would license under any kind of RAND terms. US Patent law does not require anyone to license anything.

      My guess is that Apple plays hardball and that some of the core patents will never be licensed unless the guy on the other side of the table has enough to get a broad cross. HTC has nothing right now. Google has nothing. Samsung…. different story.

    2. If AAPL put certain patents towards one of the industry standards, they would have to license to others in similar fashion.

      But that’s not the case here. They can license or not license to whoever they want, and arrange the license in any fashion they want.

  4. Any money that Apple may want to receive from HTC would only represent punitive damages (revenues lost, etc). It would be a major surprise if Apple agreed to license away even some tiniest element of the patented stuff in the iOS.

  5. It’s not hardball, it’s just good business and by defendIng its IP Apple provides an INCENTIVE to it’s competitors to innovate and not just coast on Apple’s efforts. Just to belabor the point for Google’s lawyers, patents stimulate competition in design; the absence of patents is an incentive for laziness and theft — which Google already knows.

    1. Just like in Communist countries, when the government give handouts to the people, but take away their capacity to own anything productive, then it’s a recipe for laziness, lack of incentive, innovation and disaster. A culture of sheer jealousy enveloped the whole environment where an “aggrieved” citizen will report to the authority on someone who is better than them through innovation.

        1. It was Communism during the Soviet empire and in China before it embraces capitalist methods to incentivize the enterprising Chinese. In the “Animal Farm” scenario of the pure Communist era, it did not help for individuals to become well-off through initiative or else some jealous neighbors will report them to the authorities.

      1. vsp, in suggesting the laziness of citizens in Communist countries, are you describing the people in China? It’s amazing that the laziest people in the world can have the world’s largest trade surplus while we here in America have the biggest trade deficit. The only leadership we’re showing is in increasing the size of our trade deficit and overpaying/re-electing our corporate chiefs and governing officers who brought it all about.

        1. He wasn’t saying they were lazy as a genetic trait, but that communism incentivized laziness.

          China is a capitalist country with a communist government… it is a new thing. You couldn’t say its economy is communist because you have private property ownership, competition, capitalism, etc.

          And it is only since they made that switch that we’ve seen them emerge as an industrial powerhouse.

          Your example makes his point!

    1. Dumb insensitive question vsp.

      What makes you think that you or anyone has the right to share your wife, as if she is mere chattel?

      So lets turn it around. Is your wife pimping out your butt?

  6. “Some patent lawyers are less certain that Apple will so readily sign away the rights to prized intellectual property.”

    Some patent lawyers would be right.

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