HTC Files Answer in Apple Patent Lawsuit

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HTC files its answer to Apple’s patent infringement lawsuit in Delaware with the expected denial that it has done anything wrong and also claimed that four of Apple’s patents are invalid.

Apple filed two lawsuits against HTC alleging some of the smartphone maker’s products infringe on no less than 20 of its iPhone-related patents. “We can sit by and watch competitors steal our patented inventions, or we can do something about it. We’ve decided to do something about it,” commented Apple CEO Steve Jobs when the first lawsuit was filed.

The patents Apple claims HTC is infringing on relate to the iPhone interface, the device’s hardware, display technology and the underlying architecture.

In its answer, HTC asserts that Apple’s infringement claims are invalid “for failure to comply with one or more of the conditions for patentability set forth in Title 35 of the United States Code, including, but not limited to, utility, novelty, non-obviousness, enablement, written description and definiteness in accordance with 35 U.S.C.§§ 101, 102, 103, 112, and/or 116, or are invalid pursuant to the judicial doctrine barring double-patenting.”

HTC CEO Peter Chou said “HTC disagrees with Apple’s actions and will fully defend itself.”

HTC makes several smartphone models, including some that use Google’s Android platform. Google’s Android platform shares some similarities to the iPhone OS, and there has been speculation that Android’s multi-touch support is one of the areas that pushed Apple to file its patent infringement lawsuit.

Neither company is commenting on their current legal battle.

[Thanks to Groklaw for the heads up.]

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Comments

geoduck

So they are NOT saying they aren’t infringing.
They are saying all 20 patents are invalid.
Not a strong argument.
This could get interesting.

Tiger

Geo, it’s the Egyptian defence.  “We’re in de-nile!”

Bosco (Brad Hutchings)

You misunderstand the patent game, geoduck. It really doesn’t matter whether HTC infringed or not, willfully or otherwise. There is no way any company as large as either Apple or HTC can operate in the technology market and not infringe on someone else’s patents on a daily basis. So while HTC is responding to this lawsuit, they are licensing patents, gaining market share, shaking down mutual suppliers, and probably bending the ear of the FTC and DOJ since there is government interest in how Apple plays its game.

Suing HTC was a Steve Jobs decision, and will prove a bad one. He did it because he felt hurt by Eric Schmidt. He did it at a time when very few (present company included) were speculating that Android would or even could overtake iPhone in the marketplace. The two companies weren’t at an impasse over licensing like Nokia/Apple. Steve did this to nip Android in the bud. And it failed to do even that.

This lawsuit, however it turns out, will be a minor footnote. If Apple brings the hammer down on HTC, it will barely make a dent in the Android competition. Next it will have to sue Motorola and Samsung, and eventually Google. Good luck with those.

Patent Pending

When is someone going to fix this patent mess? Patents invalid because of obviousness? How about 1-click buying? So if everyone now has to frantically patent 2-click, then 3-click and so on, 25 years from now we will be forced to click hundreds of times to buy a product? “I’m suing you for 572-click buying, I own that patent!” OUCH, my finger hurts and the tendons in my wrist have all failed. Who is going to pay the huge healthcare costs for Americans impacted by nonsense patents?

Nemo

Geoduck:  You are right that this is, claiming Apple’s patents are invalid, is a weaker defense.  But HTC has little else it can use to defend itself, because it has virtually no portfolio of patents on the technologies at issue, so it can do little else other than defend by trying to attack the validity of Apple’s patents.  Apple has some of the best patent counsel in the world, so it is unlikely that the purely procedural challenges—that is, challenges to how Apple prosecuted its patents and/or how the USPTO granted them—to the validity of Apple’s patent will succeed. 

That leaves us with substantive challenges on the grounds cited supra that go to the patentability of Apple’s patents.  While patent counsel is aggressive in prosecuting patents, making his claims as broad as the USPTO will allow, I doubt that Apple’s counsel would be putting forward patents that are substantively defective, except in one circumstance.  That is where, as here, you are going to lose the patent, if you don’t defend it, so you might as well file a lawsuit and test its validity in court.  I don’t know whether that is true here, but I suspect that it is not.  I think that Apple is suing on what its analysis shows to be strong patents, because Apple knows that all the Android OEMs, along with Google, will be informally aiding HTC in its defense, with the hope and urgent need that the court will find that Apple’s patents are invalid. 

Patents that have some obvious defect won’t stay in court past a motion to dismiss or for summary judgment.  I doubt that Apple will put forward patents that it know will lose on dispositive motions.  But we shall see.

As for the speculations about Steve Jobs’ psychological motives, that is something that can’t be known, unless you are privy to Mr. Jobs’ intimate thoughts, and Bosco certainly is not in a position to know Mr. Jobs’ thoughts.  Moreover, Apple is doing what companies do everyday and what Apple has often done in the past, which is sue to protect its IP so that it has the exclusive right to benefit from its IP as the owner of it.  You don’t need to go any further than that to explains Apple’s infringement suit against HTC.

vasic

There is no doubt that the lawsuit had immediate effect on Android. When it was announced, months back, many handset makers have responded by hedging their bets. HTC, Samsung, even Motorola had already announced Android-heavy product lines for the next year. These plans were quickly modified and, although still featuring Android in some models, most went on to include other mobile OSes (Win7, Symbian, etc).

Steve Jobs made a very dispassionate business decision to sue. It had nothing to do with Eric the Mole (Schmidt); it had everything to do with protecting market share early in the game. The end result is, even with (at least) 19 Android models currently available on the US market from various mobile carriers, a single model of iPhone is still dominant platform among the two. And there are very good reasons for that.

Bosco (Brad Hutchings)

vasic… Who do you buy your weed from? Android activations are at 200K per day. That is a pace of 6 million per month (Aug 4), a pace that doubled between the beginning of June and the beginning of August. It’s also about double the number of handsets Apple is shipping.

Last night, I showed my little voice trick on Android for navigating to Red Robin in Costa Mesa (try it, Android figures out you meant the one on Sunflower in Santa Ana) to a couple of iPhone owners I was having dinner with in a pretty noisy restaurant. Both blown away. Also blown away by Gesture Search. It’s a nice parlor trick, of course, but indispensable when you use these things several times a day. I don’t know how iPhone people live without.

tonyinsf

Apple was granted the patent last week for the ‘slide to unlock’ using an onscreen image, so HTC better come up with a better argument.

vasic

Brad,

The 200k per day is a well-documented myth, but that is not the point of this discussion. We’ve been debating the merits of the lawsuit and its consequences. The point remains, iPhone is the dominant platform among developers, and more than likely, one of the reasons is the uncertainty about the future of Android, considering the possible consequences of the suit.

As for the voice trick, it’s probably very cool. However, one thing keeps coming to mind. Three years ago, I had a Sony-Ericsson Walkman phone ($0 with any voice plan). The list of features on that phone was impressive: MP3 & video player, voice recording, camera with video, FM radio, LED flash (also working as a flashlight and flashing hazard light), full access to the file system, address book, calendar, calculator, ability to run third-party mobile Java applets (several games were provided by AT&T), mobile internet access (WEP), mobile e-mail, IM, voice dialing… The phone had features that the iPhone at the time (Original EDGE model) didn’t have yet. So, technically, no matter how you look at it, it was a better phone than the iPhone, right? The only thing; nobody (other than myself, and few other ultra-geeky types) ever used any of those features, other than phone features, and occasional picture-taking.

It is really not how many features are there, but how many people are actually using them. In that respect, Android still has ways to go.

Nemo

Dear Bosco:  Don’t worry, I doubt that they will have to live without it much longer.  There is nothing that hard for Apple to do with respect to Voice Actions.  Of the twelve Voice Actions, 7 use local databases.  As for the navigation and phone number trick, Apple purchased a company nearly two years ago that has the database to do all of that.  So stayed tuned.

honkj

———This lawsuit, however it turns out, will be a minor footnote——

uhh,  minor footnote?  if Apple wins,  which looks likely since HTC basically stole much of Apple’s tech,  it will be HUGE,  since then suing motorola and samsung, and even then Google would be fairly easy with a win over HTC…

you my friend are in big denial,  it would have the effect of shutting down the Android OS,  since much of Android is based on the tech Apple developed,  Android had no multitouch API,  and no accelerometer API,  and many many other techs,  until it stole it directly from Apple.

have fun with your argument though…  I hope you remember what you wrote when the decision comes down.

geoduck

uhh,? minor footnote?? if Apple wins,? which looks likely since HTC basically stole much of Apple?s tech,? it will be HUGE,? since then suing motorola and samsung, and even then Google would be fairly easy with a win over HTC?

Yes, legal precedent would, assuming Apple wins, make their position much stronger.

honkj

————
It is really not how many features are there, but how many people are actually using them. In that respect, Android still has ways to go.
————-

and people would actually use extra features if the company actually made it a pleasure to use…  as Apple did,  like their latest,  facetime,  will be used in mass because it is a pleasure to use,  for example with Android… even now,  the multi tasking is killing their battery time on the phones that are using Android,  and the user is frustrated,  they actually have to buy an app to kill apps that are running in the background…

this is just so basic, that it points out what Android (and MSFT before it) did wrong,  they don’t make the thing fun to use in many respects…

the camera shutter delay is laughable on many Android phones even today…

Nemo

I can assure that neither Google or any of the other Android OEMs, who are not parties to this suit, think that this is a footnote.  Google also doesn’t have a patent portfolio in any of the technologies at issue that could be used for defense or offense, and the same is true for most of the Android OEMs.  So, if the court holds that substantially all of Apple’s patents at issue are valid and enforceable, damages in a biblical amount and a permanent injunction barring the sale of HTC’s Android phones will follow, and most Android OEMs will be pulling out their pre-multitouch designs. 

There are some companies that do have multitouch technology patents that could prove useful in defense or offense, but none of those companies are Android OEMs.  The Android OEMs are just copycats.

But HTC has just filed its answer, so we have a long way to go before we get Apple obtaining a complete victory on substantially all of its claims.  But if Apple wins on substantially all of its claims, a footnote?  Yeah, like the fall of the Roman Empire was a footnote.

Jake

A patent perfects when it passes the test of a lawsuit.  Apple has nothing to lose by trying its Patents in court.  The competitors are in the market now, Apple’s loss will not change that.  Apple’s win will shake the industry.  It’s all up for Apple with nothing to lose.

Nemo

Jake, you have it precisely.  Apple has nothing to lose by asserting its patents.  HTC, on the other hand, loses big time, if Apple is prevails on substantially all of its claims.

I just read HTC’s answer.  It consist of denying Apple’s patent infringement claims; defending on the grounds that Apple’s patents are invalid; and stating boilerplate affirmative defenses, that is, yes I infringed but I have a legally valid defense that will excuse that infringement.  And to gild a lily that is already loaded with contrived brilliance, HTC’s counterclaims consists entirely of the statement that each of Apple’s patents are invalid and that it, therefore, is entitled to declaratory judgment that it is not infringing on each of Apple’s patent claims.  In other words, HTC attacks the validity of Apple’s patents twice, once as defenses to Apple’s patent infringement claims and then again as requests for declaratory judgment, because the patents are invalid.

So this comes down to whether Apple’s patents are valid and enforceable.  To the extent that they are, HTC loses.

Pseudostrabismus

TMO readers might want to recogize the authority from which Bosco speaks. Here, he is displaying his clear expertise in patent law—at least the aspect of patent law that makes all Apple patents, hardware or software, irrelevant to anybody else in the world, despite their validity or whether they have been infringed.

Another commenter asserts that Bosco cannot claim knowledge as to the company’s motives, but Bosco obviously has inside sources who know that this course of action cannot possibly be rationally inspired. (Previous suits such as Sun’s >$1 billion victory over Microsoft, are not relevant because they were not filed by Apple.)

Bosco has previously been so gracious as to favor this site’s readers with similar inside information about Apple’s motives when it rejected Flash in 2007 to create a (then, revolutionary) browser in a smartphone. (Those motives were: to make even MORE money by locking out a company that didn’t have a product to put onto the phone. Can you spell E-V-I-L?)

Apple should have listened to Adobe when they asserted they would have Flash running on a hundred million smartphones by 2009, and held off introducing iPhone in 2007. Other readers will recall previous Bosco posts in which he ALSO attributed that disastrous decison to Jobs being unhinged at best.

O one more point: don’t bother presenting conflicting info to Bosco. When he deigns to reply, his method is more to bring out another point that further shows his insights. See the bit about voice command, above: it may never enter the court of law, but when it comes to why Apple s u c k s bigtime, he’s way above stooping to the facts. All we should care about are his want-to-help-Apple opinions.

Ethan

The reality here is that by the time this case is finally resolved we will be on to iOS8 and Android 6. None of this will bother the current and in-development android phones for the next few years. Who knows what the situation will be then. HTC may be owned by Nokia, Apple may have 2 percent of the phone industry and only be a gadget company. No one knows the future.

Bosco (Brad Hutchings)

Nemo, maybe you could address how long this process will take. Also, you seem strangely confident that Apple can just copy something Google did without running into the same kinds of issues. Strange, indeed.

Off topic… Funniest part of my evening was when a new iPad owner told me that Apple was working on Flash support. I laughed, then showed her the site I wanted to show her on my Nexus One.

And P.S. I see the green up arrow on the stock price. Red is my favorite color though.

Nemo

It shouldn’t take anywhere near that long for some significant things to happen.  Most but not all federal judges move their docket along.  By the times that we are 18 months to two years into the case, discovery should be complete and the parties should have filed their motions for summary judgment.  Once the motions for summary judgment are filed, in about two years, the rest of the world should have some idea of the relative strength and merits of the parities’ cases.

Nemo

And Bosco, perhaps, you can show that new iPad owner all of the sites that are switching to HTML5 technologies(HTML5, Javascript, and CSS) and dropping Flash.  The list is already impressive and grows greatly every day.  Then you can point out to her that even the sites, which offer both Flash and HTML5, default to HMTLS, whenever the site detects that device’s browser can handle HTML5.  (The obvious lesson is that the operators of websites know that Flash runs poorly and is obsolete for today’s Web and mobile devices.  I know of no site that offers both HTML5 tech and Flash that defaults to Flash.)  And finally, you can point her to this story (http://blog.laptopmag.com/mobile-flash-fail-weak-android-player-proves-jobs-right), which shows how badly Flash works, even on the latest and greatest Froyo devices and how Steve Jobs was right about Flash sucking on mobile devices and, for that matter, on any computer.  After you show her all of that, she will thank you for showing her the wisdom of Apple’s approach in banning the slow running, crash prone, battery draining, security nightmare, and obsolete mess that is Flash from all iOS devices.

vasic

Two factors favour Apple’s win: First, they sued in the US, which is Apple’s home turf (HTC is Chinese). Second, they have the first mover’s advantage, and that usually means, their legal team has had more time to properly prepare the case.

In legal affairs as complex as this, anything is possible. However, I’d be surprised if Apple lost this one.

Bosco (Brad Hutchings)

Nemo, she just wanted to listen to a particular really cool new hip-hop artist from the ATL. There wasn’t a substitute available. And such is the nature of the web. Having access to X% of the websites on the web doesn’t mean squat when you need to access one of the (100 - X)% for which your device has no access.

I often wish that more lawyers were familiar with basic economics. For example, if Flash is dying, how is it that salaries for full-time Flash developers in Silicon Valley have basically tripled in the last 3 years?

Nemo

Don’t worry Bosco, we all well on are way to 100% or virtually 100% of HTML5 technologies.

And one of my degrees is in economics, and that training has been a great help to me in litigating antitrust and other commercial law matters.  And it is the economics, the technology, and iOS devices that are driving the move to HTML5.

Vasic, a federal district court judge, at least an honest and competent one, doesn’t care whether HTC is a domestic or a foreign company.  What will matter to him is who’s right on the law as applied to the facts.  So before the court and before the law, HTC stands in no worse or better position than Apple.

However, I agree that Apple has been planning this lawsuit and has prepared its suit as well as it can to obtain victory.  The choice of HTC proves that.  By going after HTC, which has virtually no portfolio of patents in this area, Apple picked the weakest defend and ensured that the only issue at suit will be the validity of its patents, because HTC has nothing else that it can throw into the case.  And it Apple prevails on the validity of its patents, the other Android OEMs, along with Google, will be small and easy game.

I, Steve Jobs, and Eric Schmidt could tell you who are the companies with patents in multitouch.  And after my Broker finish investing for me, I might share that info with you.

Bosco (Brad Hutchings)

OK, Mr. Economist. Explain this. Assume the supply of Flash developers hasn’t changed much in 3 years. Cost of them has gone up 3 fold in the Valley. What is the Econ 101 reason for that? Hint: it contradicts what you write here:

Don?t worry Bosco, we all well on are way to 100% or virtually 100% of HTML5 technologies.

ctopher

@Pseudostrabismus (Great word BTW!) Mr. Bosco did it again! “When he deigns to reply, his method is more to bring out another point that further shows his insights.”

See his link supra. (We’re all Nemo-phied!)

vasic

Assume the supply of Flash developers hasn?t changed much in 3 years. Cost of them has gone up 3 fold in the Valley. What is the Econ 101 reason for that?

Obviously, the volume of web content has continued to exponentially increase. That, coupled with the fact that major media companies have been rapidly trying to make their content available online (finally waking up to the fact that future revenue will be made online), and that the uninformed default choice of yesterday is Flash, so we shouldn’t be surprised why there is still this increased demand for Flash. I don’t know how soon that demand will peak. My own rather semi-educated (i.e. common sense of someone who knows a bit about the industry) guess is before the end of next year. By then, there will be several hundred million Flash-free web surfing devices in the developed world. Anyone worth their salt will attempt to avoid shutting out that large chunk of the market, especially since those Flash-free device owners are, on the average, noticeably more affluent than the overall average user.

My other guess is that before 2011 is out, Adobe will release, as a part of their CS Web Premium, a development tool that will allow fairly rapid and intuitive creation of rich interactive web content in HTML5. There’s no way Adobe will stay in the station with that train leaving. This may even be some beefed-up version of Dreamweaver on steroids. Whichever it is, it will surely emerge in the next year or so, since the dire need will very soon be glaringly apparent.

Nemo

First, I don’t accept your assumption about the number of Flash developers, but accepting your numbers arguendo, their cost have, as you said, gone up over the past three years, which is well before Apple began its assault on Flash, which began in earnest this summer, dating from Jobs’ comments on Flash and Apple’s banishing of Flash from the iPhone 4 and the newly introduced iPad.  When Apple booted Flash of its iPad because of its deficiencies, that is when Adobe went whining to Government, and Flash still has a legacy monopoly on the Web.  I don’t know what the half life for Flash is, but it will be around for a while, providing jobs developers, but the future is HTML5 technologies.

Bosco (Brad Hutchings)

Nemo,

I know there are a few people here who can’t follow multiple conversations at once. But you’re not one of them… To my point that Google is about search, and voice recognition is a much bigger venture than Apple can just buy and integrate, I submit this article that just popped up on Gizmodo.

Gmail Voice is About Search, Not Free Calls

I’ll add a corollary that I believe is really the main point: Mobile is about convenient search, not apps (or even Flash, HTML5, or multi-touch). The latter are small little features. Apple may be able to extract rents from its patents pertaining to multi-touch, slide unlocking, etc. But those rents will be mere drops in the ocean of mobile. Two years down the road, when a decision in the HTC case comes down, Apple can decide whether it wants to go collecting from everyone or wants its platform to be relevant. Google knows now that the only way to buy that future relevance is to have on the order of 100 million people training your voice recognition software. If Apple acts the role of the jerk 2 years from now, do they get access to what Google has spent years perfecting?

vasic

In any platform struggle, economy will eventually dictate the outcome. If one solution covers 100% of the market, and the other covers a continuously shrinking subset of that market, and you are selling a product, the basic economy question here is: will development of a solution that addresses the whole of the market (HTML5) cost me more than the difference in revenue I could possibly generate by addressing that market, rather than developing a solution only for the shrinking subset? I.e. if Flash development costs less, how long before the savings in development are lost over unrealised revenue from those that can’t view the content?

Bosco (Brad Hutchings)

Sure vasic, that’s a way to frame it. Except right now, Flash covers 98%+ of Internet connected devices and HTML5 covers less than 48% (July 2010 stats). HTML5 for video suffers the problem of needing two formats to cover more than 60% of installed base that can use HTML5. It also suffers from inconsistent implementation, one reason YouTube cited for sticking with Flash as a critical delivery platform.

Believe what you like, though.

Pseudostrabismus

Allow me to underline some of my idol’s points:

“Flash covers 98%+ of Internet connected devices…” even if it’s approximately 0.01% of mobile devices.

“HTML5 covers less than 48%?” most of which would be either (a) Windows users who’ve chosen to stick with IE6; or (b) at least 1-year-old mobile devices, none of which can run Flash, either.

“I ... showed her ... my Nexus One.” This is relevant to the question of the lawsuit, of course, because the Nexus One is made by HTC, and would infringe the same patents that Apple asserted against HTC. Brad’s expertise in things anti-Apple now extends to including this interesting piece of trivia: “what was the FIRST smartphone that Adobe said they would go all-out to support Flash on, that was DISCONTINUED before Adobe actually delivered?” Just goes to show {a} what skunks those Google people are; pulling the rug out from under Adobe; and {b} that Bosco’s knowledge base extends BEYOND just everything anti-Apple! Bonus extra: this will NOT be the last smartphone that Adobe claims it will support but will die before the code hits. Can you name them?

It’s a pity that your friend will have to come to see Bosco to play her games while on the go; it may distract him from his meditations. For indeed, if she wants a *mobile* device that runs Flash, she will have to…
* get a Windows netbook. Ugly, cheesy, slow; lousy battery life; no touch interface; impossible to read multi-column PDFs or books.
* an old Toshiba TankSlate or whatever they called them. My wife hated hers, but she COULD flip the screen around tablet-style. Heavy. No battery life. Not for the non-technically-inclined.
* get an EVO. Battery burner; lousy graphics display; terrible for reading. Requires Sprint.
* get a MacBook Air. clamshell design; not one of Apple’s greatest hits. Wifi only; no 3G.

With the exception of the Air, most TMO readers will not be interested in such misfits, just so they can see Flash, but Bosco sounds like he has a new, close friend. Win-win!

Pointedly missing from this list: almost EVERY smartphone and even the actually-announced Android tablets. In other words, Bosco has shown us that Flash is nearly totally missing from the mobile web. But as all real (Boston) Americans say, Wait Till Next Year!

“Mobile is about convenient search, not apps…” Here’s a DEEP insight: forget all the “clamoring” for Apple to open up its platform in 2007; and the fact that the iphone, even with search built into Mobile Safari 1.0, failed to take off UNTIL people were pushing apps. Our guru knows that most people REALLY want a GENERIC search feature, such as Google does so well, rather than more targeted apps such as finding where one’s friends are, a decent Viet restaurant within a few blocks, YouTube, news updates, mail, etc. Who are we mortals to doubt? Whatever SOMEBODY other than Apple is good at is what really matters. It’s NOT just about Adobe, which has squat on mobiles, it’s about ANYTHING BESIDES APPLE!!!

Hope that clears it up, dudes & dudettes!

Bosco (Brad Hutchings)

I guess in acting like an insufferable ass, Pseudostrabismus, you didn’t anticipate this news item. Hundreds of thousands of Flash capable phones just magically started appearing today. And the cycle will repeat for a dozen or so handset models with varying features and price points in the coming month.

If you want your train to run on time, stick with iPhone. To me it has the feel of a Fisher Price toy train set compared to Android, but if that suits your needs, great. Android is a little staggered, fragmented, messy, whatever you want to call it. But it’s also kicking ass and taking names in the smartphone market and for good reason. It is a far better smart phone platform for the non Fisher Price crowd precisely because Google takes a mostly laissez faire approach.

I think Apple fans ought to honestly ask why and not accept smug self-serving answers. But I also know that many Apple fans are heavily invested monetarily, emotionally, and spiritually in the buying choices they’ve made. I know that as I’ve opened my self up to universe outside of Apple, I have found a lot of outstanding value. I still primarily use a Mac, develop on a Mac, etc. But I have a better understanding now than I did of switching costs, tolerability trade-offs, and many greener pastures off the Apple reservation.

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