There is a big time cloud of fear hovering in Android world tonight as administrative law judge (ALJ) Carl Charneski determined that HTC infringed two Apple patents. This means that it is possible that Apple could put an import ban on some of HTC’s devices or enter into a licensing deal. Although the latter is better for Android, it would still not be a good situation because it would cause problems for other OEMs like Motorola and Samsung, not to mention the high costs.
Should we panic just yet? Today’s decision is an “initial determination” which will eventually be reviewed by a six-member Commission, the highest decision-making body by the International Trade Commission (ITC). This initial determination was originally scheduled for August 5th, but for whatever reason they moved it up. The target date for the final decision is scheduled for December 6, 2011 which could also be moved up.
Three months ago, the ITC staff’s opinion was that HTC did not infringe on any Apple patents, but somehow the ALJ had a different perspective on 2 of the 10 patents:
U.S. Patent No. 5,946,647 – on a “system and method for performing an action on a structure in computer-generated data.”
U.S. Patent No. 6,343,263 – on a “real-time signal processing system for serially transmitted data”
These two patents appear to be related to code that is at the core of Android and also happens to be an issue between Apple and Motorola. Since the patents appear to relate to Android itself, this could effect other OEMs which could result in either import bans or damages to Apple.
The ITC can impose import bans, but cannot award damages. Basically, if Apple prevails, they will ask HTC to pay damages, and if they refuse, it will wind up in a federal court to determine the damages.
Part of HTC’s strategy is the purchase of S3 Graphics, which recently obtained an ALJ determination against Apple. HTC could use this decision to cut a deal, but many feel that it is more likely that those patents are not valued by Apple.
Then there is the latest case that Apple filed against HTC a few days ago, which involve another 5 patents, and three federal lawsuits in Delaware. There is no question that Apple has put the heat on HTC, Motorola, Samsung, and Android in general.
So is it all doom and gloom? As mentioned, today’s decision is the initial determination and we are still months away from the final determination. Grace Lei, general counsel for HTC said, “HTC will vigorously fight these two remaining patents through an appeal before the ITC commissioners who make the final decision. HTC has alternate solutions in place to work around the patents.”
We are still at the beginning of a long road of legal battles created by Apple and Microsoft. Apple may have won a battle today, but they have not won the war. We are dealing with big companies with a lot of cash, and no doubt have plans that we cannot think of. I have faith that these companies will be able to fight off these competitors that find it difficult to just simply compete in the marketplace.