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Much of Apple's Mac computer lineup has been found in infringement of HTC's newly acquired intellectual property. This could lead to a ban on imports -- effectively a ban on sales -- in the U.S.  (Source: Cult of Mac)

Meanwhile, Apple has filed yet another ITC complaint against HTC, this time alleging that the new HTC Flyer tablet infringes on its intellectual property.  (Source: HTC)
Apple will have to pay up -- or negotiate a settlement

Apple, Inc. (AAPL) has put Taiwan's HTC Corp. (SEO:066570) in a very bad spot.  The larger, more profitable gadget maker has hit HTC with a series of lawsuits worldwide, and recent scored a favorable preliminary ruling, which could lead to a complete ban on HTC handsets in the U.S.

But HTC appears to have some leverage, now.  In an unsealed ruling dating back to July 1, it has been declared that Apple infringed on intellectual property of recent HTC acquisition S3 Graphics.

The IP in question covers image compression techniques in software and hardware.  The U.S. International Trade Commission Judge James Gildea ruled that while Apple's popular iPad, iPhone, and iPod lines of mobile gadgets are not in violation of the IP, some of Apple's Mac OS X computers are.  

As NVIDIA Corp. (NVDA) is a licensee, units with its GPUs are not in violation.  However, models with graphics by Advanced Micro Devices, Inc. (AMD) or integrated graphics from Intel Corp.'s (INTC) (such as the newly refreshed MacBook Air lineup) are in violation.

The ruling thus clears the way for a partial ban on the import of Macs.  As virtually all Macs are manufactured outside the U.S. (mostly in Asia), this would be a major blow to Apple's booming computer lineup, which posted in $17.5B USD computer sales last year.

The judge also ruled that two of S3's patents in the case were invalid, and that some of the minor claims within the two valid patents were invalid.

While the ruling was "unsealed" (made official), it has not yet been made available to the public as the companies are reportedly quibbling about what constitutes redaction-worthy confidential information in the document. Bloomberg reported on the release, based on early information.

The ruling now goes before a full six judge ITC panel for confirmation.

While a ruling which found Apple's iPad and iPhone -- which accounted for 46 percent of its revenues last year -- would have been even better, 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.

Meanwhile, Apple filed two weeks ago, on July 15, a new ITC complaint against the HTC Flyer tablet, which it says infringes on several of its patents.  Of course, if the companies can come to terms, HTC's tablet lineup would, in theory, be covered under a cross-licensing agreement, as well.

If the S3 IP can save HTC from Apple's litigious wrath, that $300M USD acquisition, which was blasted by investors, could just turn out to be a great deal.



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RE: An alternative perspective
By Fritzr on 7/27/2011 1:27:28 PM , Rating: 2
They are in violation of the patent if they use the infringing tech. If the GPU circuits are disabled or better disconnected, then there is no use of the patented tech and thus no infringement on the part of Apple. However the supply chain is endangered as a suit filed against Intel could cut off supplies of the CPU.


RE: An alternative perspective
By Iaiken on 7/27/2011 1:35:31 PM , Rating: 2
quote:
They are in violation of the patent if they use the infringing tech.


Wrong, they are in violation of the patent if they SELL the infringing technology. Since it cannot be permanently disabled physically or removed, Apple would be in violation simply for getting payed for the silicon that makes use of the technology.


RE: An alternative perspective
By Iaiken on 7/27/2011 1:41:51 PM , Rating: 2
To further demonstrate the point from a legal perspective.

You hold a patent on how to make rope.

I make something that includes rope, but it's just there and serves no real function.

If I buy rope for my product from someone that is not licensed to make it and then I resell it, I am in violation of your patent as well. Why? Because I am making money off a product that included rope in it's manufacture and you didn't get paid for said rope.


RE: An alternative perspective
By Fritzr on 7/27/2011 2:07:34 PM , Rating: 2
Only if you are making rope a necessary part of the function of your device and takes part in the proper function of your device. Bolting a spanner onto an I-beam does not mean the spanner is doing anything more than decorate an I-beam. As long as it is not visible, it is simply there and likely has no intended function.

Real world examples of the way I suggested are:

The i386SX which was often a fully functional i386DX with the math coprocessor disconnected/disabled.

The i486SX which was often a fully functional i486DX with the math coprocessor disconnected/disabled.

More recent are the AMD X3 parts. The OC community discovered that a subset of these were in fact X4 parts that had 1 core disabled which could be reenabled by the end user. It was a lottery, but the odds were good enough that people were buying X3 parts deliberately hoping to get a cheap X4.

By physically disconnecting enough of the connections required by the GPU to prevent it's function, it is removed from the chip as far as use in the unlicensed device is concerned. Designing the socket to disable the GPU would have been an excellent defense in a case of the kind Apple is facing today :)

In this very specific case, Apple is being accused of purchasing and using the GPU in a commercial product without a license. They are not being accused of installing intel chips that have been crippled in a manner that removes the GPU from service.

Intel could, if it chose to, offer an equivalent chip with the GPU factory disabled. Intel has chosen not to up to this time. That issue is between Intel & HTC and is not a part of this court case.


RE: An alternative perspective
By DanNeely on 7/27/2011 2:25:21 PM , Rating: 2
quote:
The i386SX which was often a fully functional i386DX with the math coprocessor disconnected/disabled.


Your memory is a bit off here. No 386's had an on die FPU. The difference between the SX and DX models was that the former had a cheaper 16 bit bus instead of a 32bit bus; similar to the 8088 and 8086 chips from two generations prior.


RE: An alternative perspective
By Helbore on 7/28/2011 5:38:05 AM , Rating: 2
He's thinking of the 486, where the DX had an onboard co-processor and the SX had the co-pro disabled. I think there was also an L2 cache on the DX (actually, I think it was on the mothboard, rather than on-die) which was also not available for the SX.


RE: An alternative perspective
By bh192012 on 7/27/2011 4:23:53 PM , Rating: 2
I sure do hate paying Apple for their patents. So it's ok then if I sale an iphone case, that just so happens to have a iphone clone in it w/o a battery.


RE: An alternative perspective
By tng on 7/27/2011 2:10:07 PM , Rating: 2
I think that you are looking at this from the wrong perspective.

Regardless of what you think of Apple, Apple is not wrong here because if it's use of Intel silicon, Intel is. HTC could force the issue with Intel, but Apple bought what they could argue was technology from Intel that they did not know was in violation.

Just my 2cents...


"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain














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