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Move deals a blow to America's largest smartphone seller, but it won't likely hurt its flagship offerings

Remember how the Imperials stormed into the rebel base on Hoth, just as they were successfully clearing out?  That's more or less how one of Apple, Inc.'s (AAPL) biggest court victories played out.  Much like Apple's short-lived Netherland's sales ban against Samung, its legal victory over Taiwan's Android-endowed HTC Corp. (TPE:2498) only temporarily hits the Asian smartphone maker's lower end products.

I. Apple Manages to Annoy Sales Rival

Christmas came early for Apple, facing off in Washington D.C. before the U.S. International Trade Commission (ITC).  As companies have increasingly begun to do in recent years, Apple had turned to the ITC to play court and offer a back door to ban its competitors' products.

The ITC examined several of Apple's patent claims (including a humorous one in which Apple claimed to have "invented" interrupt driven undervolting of a computer chip).  In the end it decided that HTC was presumably in infringement of only one of those patents -- U.S. Patent 5,946,647.

AT AT Apple Invasion
Apple has struck a blow at the pesky Android rebels, with a token victory over HTC's legacy products. [Image Source: LucasFilm; modified]

Like many of Apple's technology patents, it came from the lucrative period between 1998 and 2004, where Apple pushed through increasingly ambiguous patent claims, which it would use over a decade later as a club to try to beat back its mobile competitors.

The patent seems to cover in various vagueries some sort of software framework that takes messages and then launches events -- a nebulous description that could cover everything this side of Windows 7 to Watson the supercomputer.  

The abstract reads:

A system and method causes a computer to detect and perform actions on structures identified in computer data. The system provides an analyzer server, an application program interface, a user interface and an action processor. The analyzer server receives from an application running concurrently data having recognizable structures, uses a pattern analysis unit, such as a parser or fast string search function, to detect structures in the data, and links relevant actions to the detected structures. The application program interface communicates with the application running concurrently, and transmits relevant information to the user interface. Thus, the user interface can present and enable selection of the detected structures, and upon selection of a detected structure, present the linked candidate actions. Upon selection of an action, the action processor performs the action on the detected structure.

The patent was filed in 1996, over a decade before Apple announced its first smartphone was coming.

II. Busines as Usual for HTC, Despite Ban

The interesting thing is that the ITC somehow seemed to reach the opinion that a shift occurred around Android 2.3 Gingerbread, removing the infringing feature.  This means that not only did most of Apple's claims get dismissed, but that its sole successful claim only worked towards banning a handful of aged HTC devices, which were still sporting Android 1.6 ("Donut", remember that?), Android 2.1 "Eclair", and Android 2.2 "Froyo".
Older HTC Phones
Only HTC's older models will be barred from U.S. sales, come April. [Image Source: LA Times]

Noticeably not on the list is HTC's flagship product lineup, which includes best-selling smartphones such as the HTC Rezound.  

HTC cheered this positive turn of events, commenting, "We are very pleased with the determination and we respect it.  However, the 647 patent is a small UI experience and HTC will completely remove it from all of our phones soon."

Even if the ban is ratified by ITC President , it won't go into effect until April 19, 2012.

If Apple hope to use the lawsuits to regain its U.S. sales lead, which it recently lost to HTC, it's likely out of luck.  And while Apple may be able to at least effectively harass patent-poor HTC, Apple has seen its legal campaign against the world's top smartphone maker, Samsung Electronics Comp., Ltd. (KS:005930) start to collapse.

Earlier this month the ITC slapped down Apple's request to ban Samsung's mobile devices.  And in Australia it saw one of its lone victories over Samsung erased as a pair of appeals courts unanimously decided to lift a sales ban, admonishing a lower court judge, who they argued grossly misinterpreted the law in her pro-Apple decision.

II. The More You Tighten Your Grip... The More Star Systems Slip Through Your Fingers.

Falling behind in both domestic and international sales to its surging Android rivals, Apple CEO and co-founder in his waning days urged his workers to spend the entirety of Apple's substantial cash fortune, if necessary to try to legally drive Android into the ground.

For it's part Apple is reportedly trying some more clever techniques, founding shell companies, such as Cliff Island LLC, and partnering with experienced "trolls" like Digitude Innnovations.  Apple also continues to patent seemingly obvious technologies that have been on the market for several years or more, such as the swipe unlock, a feature found on Neonode Inc.'s (NEON) mid-2000s feature phones, and on other early products.  Oddly the U.S. Patent and Trademark rubber-stamped two Apple patents on that particularly feature, with nary a question or complaint.

Currently while Android smartphone makers are drastically outselling it (roughly 5-to-2), Apple is still wildly more profitable, rivalling Exxon Mobile (XOM) for the distinction of being the world's most profitable company.  But those massive sales are predicated on the continued success of Apple's tablets and smartphones.  If that market share continues to dwindle, as analysts are predicting, Apple may find itself falling off its record fiscal fortunes, which it has enjoyed of late.

Sources: ITC, ArsTechnica (Apple patent trolling)



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RE: In other news
By xype on 12/20/2011 12:46:25 AM , Rating: -1
He’s actually not very bright, at that. So most of his "analysis" is quite naive and at times flat out wrong. Why AnandTech keeps DT in their sidebar is beyond me…


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