ITC says HTC's Apple violating two of patents Complaint

Apple scored a legal victory today when the U.S. International Trade Commission made an initial ruling that HTC had violated two of its patents used in its mobile devices, dealing a blow to the Taiwanese company's ongoing patent fight with the iPhone maker.

The ITC administrative law judge's initial determination was that HTC infringed on two of the 10 patents Apple on Monday, saying that Cupertino, California-based Apple's devices didn't violate four of HTC's patents, which cover technology for looking up and quickly dialing phone numbers and different techniques for managing power consumption on portable electronic devices. The ITC still needs to make a final ruling on the complaint. A loss carries the threat that HTC's products would be banned from coming into the U.S., and Apple only needs to get a favorable decision on one of the patents

HTC said it would appeal the decision.
HTC said it is waiting to get a full copy of the ruling before it decides how to proceed, but experts say HTC could ask the ITC to review its decision.

"HTC will vigorously fight these two remaining patents through an appeal before the ITC commissioners who make the final decision," said Grace Lei, general counsel for HTC. "This is only one step of many in these legal proceedings." HTC shares fell 4.6% to NT$708.00 ($23.5), while Apple shares recently traded down 1.2% at $416.89.

"This is only one step of many in these legal proceedings," HTC General Counsel Grace Lei said in a statement. "We are confident we have a strong case for the ITC appeals process and are fully prepared to protect our intellectual property." An Apple representative referred back to the company's initial statement when it filed the complaint last year

AllThingsD reports that two patents relate to a "system and method for performing an action on a structure in a computer" and a "real-time signal processing system for serially transmitted data."

Apple didn't immediately respond to a request for comment.
With sales of smartphones booming, and growth expected to continue, litigiousness among large technology markers has grown to a fevered pitch. FOSS patents, meanwhile, said the patents in dispute make up the core of Android's operating system, and could have repercussions on all Android handset manufacturers.

The latest development is also a major blow to HTC, which has made strides in building market share and a brand with its line of Android-powered smartphones, many of which feature the company's own Sense user interface. The ruling represents another victory for Apple in its ongoing patent disputes with many of its rivals around the world, but analysts say Monday's decision is more of a prelude to more important rulings that will come in November and December.

On November 13, the ITC is expected to decide on a preliminary ruling that Apple violated two patents owned by S3 Graphics, a company HTC is in the process of acquiring. Apple had filed a second complaint with the ITC, claiming that five additional patents were being illegally used, including one used for scrolling operations, another for programmable tactile touch-screen displays, and one for a double-sided touch-sensitive panel, all of which are used in another complaint against Samsung.

Samsung Securities analyst Birdy Lu said a cross-licensing agreement seems for now the most likely outcome and added a recent suit filed by HTC using patents it obtained from Google to pose a stronger threat against Apple. The other relates to the ability to scroll, zoom, and rotate content on a screen, while the last references "portable computers."

Apple, in particular, has locked horns with a variety of companies including Samsung Electronics Co. and Motorola Mobility Holdings Inc., which is being acquired by Google Inc. Technology companies in recent years have increasingly used the ITC to settle their disputes because the process is seen as more efficient than the federal courts.

HTC is considered the most vulnerable legally of the Android partners because it lacks a robust portfolio of patents that act as a potential shield. Earlier this month, HTC purchased S3 Graphics, largely because of a collection of patents that the ITC administrative law judge recently determined were used illegally by Apple.
Apple, meanwhile, is still in the middle of a similar patent fight against Samsung Electronics.