May 13, 2010 / 1:16 AM / 8 years ago

HTC sues to block iPhone, iPad, iPod sales

NEW YORK/SAN FRANCISCO (Reuters) - HTC Corp fired back on Wednesday in its legal battle with Apple Inc, asking the U.S. International Trade Commission to ban sales of iPhones, iPads and iPods in the United States.

In a complaint filed with the ITC and obtained by Reuters, HTC accused Apple of infringing five of its patents related to cellphone directory hardware and software and power-management technology in portable devices.

HTC’s action was widely expected after Apple filed a patent infringement suit against the company in March.

Apple’s move against HTC was seen as a proxy for an attack on Google Inc. Taiwan’s HTC makes smartphones based on Google’s Android software, which has gained ground on Apple’s popular iPhone.

In the complaint dated May 12, HTC said Apple violated patents on technology that helps devices such as the iPhone manage power and handle phone directories, and on technology that enables the just-launched iPad tablet computer to store data when in “sleep” mode, among other applications.

HTC is seeking a ban on importation, marketing and sale of Apple’s popular mobile devices in the United States. Apple, whose products are made in countries such as China, declined comment.

For its part, Apple accused HTC of infringing 20 patents. In addition, Apple filed a complaint with the ITC and also sued HTC in the U.S. District Court in Delaware.

“We are taking this action against Apple to protect our intellectual property, our industry partners, and most importantly, our customers that use HTC phones,” Jason Mackenzie, HTC’s vice-president for North America, said in a statement.

MKM Partners analyst Tero Kuittinen was not surprised by HTC’s move against Apple, but said the larger question was about HTC’s patent portfolio, which he said did not measure up to those of rival handset makers such as Nokia Oyj.

“I think it’s widely acknowledged that HTC’s IP portfolio is not particularly strong, because they got started on this way later than the other guys,” he said.

CCS Insight analyst Ben Wood said HTC’s patents stretched back to the days before it was making its own branded handsets.

“This move might see it drawing on intellectual property created when it was working as an ODM supplier to several mobile carriers and other manufacturers such as Compaq,” he said. ODM stands for original design manufacturer.


According to IDC, Apple held 16 percent of the global smartphone market in the January-March period, and HTC around 5 percent. Apple was the No.3 vendor, one slot ahead of HTC.

“HTC seeks, as relief, a permanent exclusion order barring from entry into the United States all infringing portable electronic devices and related software imported by or on behalf of Apple,” HTC said in its complaint.

Investors cheered HTC’s move, sending the companies Taipei-listed shares 3.4 percent higher by midday in a broader TAIEX market up 1.4 percent.

“The move means HTC has confidence in its own patents and that will help its sales in the United States,” said Jih Sun Securities analyst Richard Ko. “However, it will take some time before we see the outcome of the lawsuit.”

While Apple’s lawsuit against HTC did not name Google as a defendant, it was seen as a strategic move against Google, whose mobile software powers handsets from Samsung Electronics, Motorola Inc and others.

Google allows smartphone makers to use its software for free.

Research group NPD said smartphones using Android software passed Apple to claim the No.2 spot in the U.S. market in the first quarter.

The ITC, a U.S. trade panel that investigates patent infringement involving imported goods, has become an increasingly popular venue for patent lawsuits because it can bar the importation of products that infringe patents.

Legal wrangling is commonplace in the smartphone market, an industry where many vendors work under cross-licensing agreements. Just last month, HTC struck a licensing deal with Microsoft Corp.

Apple is also fighting a high-profile legal battle with Nokia, the world’s top handset maker. The companies have sued each other over patents related to mobile device technology.

Additional reporting by Diane Bartz in Washington D.C., Edwin Chan in Los Angeles and Baker Li, Roger Tung in Taipei

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