HTC CEO Calls Pro-Apple ITC Ruling a “Distraction”

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HTC Corp. CEO Peter Chou told investors on Friday that he is confident in his company’s business, and he called a ruling from the U.S. International Trade Commission that his company’s Android devices violate two of Apple’s patents a “distraction.”

Apple vs. HTC

The company is in the midst of a patent-related imbroglio, whereby his company has been found to violate two of Apple’s patents, while Apple’s Mac OS X was found to violate patents that his company purchased just five short days after those same patents were deemed unpatentable by the U.S. Patent & Trademark Office.

The ITC rulings could theoretically lead to import bans on either company’s products, though both rulings must survive a lengthy review process before that could happen. The ruling on Apple’s infringement is not likely to survive that process due to the above-mentioned USPTO findings, but the fate of the ruling of HTC’s infringement is anyone’s guess at this point.

In addition to the ITC rulings, Apple and HTC are involved in parallel lawsuits over the same patents. The lawsuits could result in damages or licensing fees being collected by an eventual winner, and are likely to be strongly influenced by the ITC and the USPTO’s actions.

Meeting with investor over the telephone, The International Business Times reported that Mr. Chou said, “Many lawsuits nowadays are results of being successful; it’s part of the business. We will not bring the company to a dangerous position.”

The Wall Street Journal added that Mr. Chou, the man who OK’s the purchase of recently invalidated patents, told investors that he was confident that the lawsuits would not affect HTC’s business.

We’ll just have to wait and see how that works out.

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7 Comments Leave Your Own

furbies

A ruling in your favour: Vindication.

A ruling against you: Distraction.

The spin artists/PR hacks will be busy.

dmarcoot

I would call it a distraction to if i had just spent 300 billion on patents 5 days after they were declared invalid due to prior art.

Bosco (Brad Hutchings)

One thing that’s often overlooked in this discussion is that HTC didn’t just scour the sea for S3 and burn $300M on the hope of a counter-attack. According to this article on BBC:

HTC is in the process of buying S3 Graphics, part-owned by HTC’s co-founder and chairwoman Cher Wang.

It’s not quite the clueless expenditure that Apple fans would love for it to be. S3 has licensing revenues that will make the purchase a net-positive in appropriate due course. HTC is not starved for capital in the least.

I think the most likely scenario is that the ITC will find that HTC violated the two old patents and will either come up with some kind of consent decree with HTC where HTC promises to end the specific infringement in some time frame or the ITC will take no enforcement action and tell Apple it either needs to license or take the issue to court (where it belongs). I don’t see Apple settling unless it’s also facing a decision against it. Apple’s leadership is too upset that 75% of the smart phone market doesn’t want their iPhone.

Nemo

Dear Bosco:  Whether HTC’s purchase of S3 will be useful in defending the many Android’s IP infringement actions of Apple and others, remains to be seen.  However, it is clear that the four patents that S3 tried to assert against Apple at the ITC weren’t of much use:  The ALJ immediately disposed of two of them on the ground that none of Apple’s products infringed on them, and the USPTO has found the claims that S3 asserted as being infringed in the other two patents are unpatentable because of prior art.  So for HTC to get any value out of the purchase of S3 for patent disputes, HTC will have to find something else in S3’s portfolio of patents.

However, Mr. Chou, HTC’s CEO, has been helpful at least in this regard.  By informing and instructing the ITC’s Commission that it will find for HTC, reversing the ALJ’s finding for Apple, he saves the Commission the effort of reaching its own conclusion on the appeal.  Frankly, I don’t know why more petitioners don’t do this, that is, simply tell the Commission how it will decide an appeal.

One of the things that most delighted me in the BBC article, aside from the errors of fact by the reporter, was Mr. Chou’s statement that HTC was a great innovative company that had been making smartphones before the iPhone.  Well, I suppose it depends on what you call a smartphone and what you mean by making.  Prior to the iPhone, HTC made Palm and Nokia-like “smarphones” of the pre-iPhone era for order, according to the specs provided to it.  I suppose that is certainly making, but I don’t think any reasonable person would call a contract manufacturer, which is what HTC was and, with respect to innovation, pretty much still is, an innovator.  The only difference is that today the specs are being provided by Google through its reference standards and licensing provisions for Android. 

Yet, Mr. Chou insists that HTC is an innovator:  “Mobile phone industry experts may be praising HTC for its smartphone innovation. “Their DNA has always been about technology innovation,” says Ms Milanese. But the company holds just a couple of hundred patents, according to Mr Chou.”  What I’d like to know is how a company that has invented only two hundred patents in its entire history, before the purchase of S3 235 patents, can be an innovator?  Samsung has some 28,700 patents.  So if HTC’s two hundred patents make it an innovator, Samsung’s 28,700 patents must make it a god of innovation.  Either that or HTC is just spouting BS.

The ITC coming up with a consent decree?  Bosco, to begin with a consent decree is a settlement negotiated between a government enforcement agency, often the DOJ or FTC, and a private party, which a court approves.  Before the ITC, you have private parties, so you can only have a settlement among those parties, and since the ITC isn’t an Article III federal court, it can’t approve of or enforce any parties’ settlement.  The ITC has very limited jurisdiction.  It can hear disputes regarding alleged infringement, and, if it find infringement, it can only provide remedies provided under the Trade Act, which is essentially an exclusion order banning import of infringing products into the United States.  The ITC’s jurisdiction is pretty much limited to either banning products or not, and shaping its exclusion order so that it reaches only the infringing product; it has no broad authority based on law or equity, as does a court of competent jurisdiction, to issue other kinds of judgment and orders and to fashion remedies.  So if the ITC finds that HTC has infringed, it must ban HTC’s infringing products, though it can stay its orders pending appeal or regualte to a limited extent the timing of its exclusion order.  If HTC wants relief from an ITC exclusion order, it must go to the Fed. Cir. Court of Appeals, which is an Article III federal court.

As for Apple’s leadership being upset, anyone would reasonable be upset with a person who succeeds by stealing your IP.  But rather than just get mad, Apple’s is enforcing its rights in the appropriate tribunals. 

However, you are, Bosco, right about one thing:  Apple invents its IP to give it a competitive advantage in the market, so it almost never licenses IP that gives it a competitive advantage, choosing instead to practice its inventions itself and reaps the rewards of that practice.  So far, Apple has been doing pretty well, so well, in fact, that it appears that several of its competitors have decided that, if you can’t compete exceeding or at least matching Apple’s inventions, then compete by just using Apple’s IP without Apple’s permission.  Is it any wonder, then, that Apple is upset.

Intruder

Apple?s leadership is too upset that 75% of the smart phone market doesn?t want their iPhone.

And 78% of Android users don’t want HTC phones.

Both statistics are equally meaningless.

wab95

CEO Peter Chou told investors on Friday that he is confident in his company?s business, and he called a ruling from the U.S. International Trade Commission that his company?s Android devices violate two of Apple?s patents a ?distraction.?


Or in the words of the Black Knight, “It’s just a flesh wound!”.

Things have looked better for HTC, but they are not done yet. They’ve still got legs; the question is, does their suit?

RonMacGuy

75% of the smart phone market doesn?t want their iPhone.

Funny, I thought it was 75% of tablet buyers don’t want android tablets. Oh wait, I’m sorry, that’s 90%+ of tablet buyers that don’t want android tablets. My mistake!!

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