Apple v. HTC: Don’t Expect Fireworks

Anyone expecting legal fireworks to come from the patent infringement case that Apple has filed against HTC is going to be disappointed, at least for the foreseeable future. Unless HTC falls over itself to settle the case, it will be months or years before anything happens.

Nilay Patel at Engadget has an excellent breakdown of the details of Apple’s complaints. Like nearly all patent litigation, the case is highly technical and bone dry. But the case is likely to proceed in a predictable fashion.

Apple has actually brought two separate cases, one in U.S. District Court in Delaware. the other before the U.S. International Trade Commission. As my former colleague Arik Hesseldahl points out, the ITC has become an increasingly popular venue for patent infringement cases, both because it moves much faster than the federal courts and because it is easier to get an importation ban from the ITC than it is to get an injunction from a federal judge. The ITC, however, cannot award monetary damages, while federal courts  can force infringers to pay three times the actual damages.

The ITC’s power to ban imports is a potent weapon in cases involving electronics since nearly everything is manufactured outside the U.S.  But while the ITC issues these bans frequently, they hardly ever actually take effect. Instead, they are a very powerful incentive to settle the case. ITC rulings can, however, be appealed to the Court of Appeals for the Federal Circuit, a specialized panel that handles patent cases.

Patent cases in the federal courts are notorious for taking forever to resolve. It generally takes a couple of years just to get a case to trial, and it’s not unusual for a patent dispute to bounce back and forth between trial courts and appeals courts for years. The drawn-out patent battle between Research In Motion and NTP involved only one appeal and still lasted for six years before RIM finally settled,

Probably the most important factor in determining how this case will play out is whether HTC holds patents that it can claim Apple has infringed. It could then file counter-complaints (and yes, the ITC could prohibit the importation of Chinese-made iPhones even though Apple is a U.S. company). That would open the door to a cross-licensing agreement, probably the most common ending to a patent dispute where both parties actually produce product and own intellectual property. But even that is unlikely to occur before there have been some hearings before a judge or the ITC that allow the parties to assess the relative strength of their cases.

In the end, it is unlikely that anyone is going to prevent anyone else from importing phones or even forcing significant changes in products. One way or another, the case will eventually be settled. The real significance of the litigation is that what is increasingly turning into a smartphone war of Apple versus everyone else is getting much, much nastier.

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One Response to “Apple v. HTC: Don’t Expect Fireworks”

  1. Rich Repplier Says:

    Apple versus everyone else is an uncomfortable position for Apple. But maybe it’s a predictable consequence of being a highly successful leader that everyone wants to copy or beat.

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