Neil Hughes
Mike Abramsky with RBC Capital Markets believes that Apple has the upper hand over HTC, which is a smaller handset maker with a limited portfolio of intellectual property. As such, Apple could potentially push for an injunction and ask the U.S. International Trade Commission to bar the import of HTC handsets.
Instead, Abramsky believes it's more likely that Apple will try to establish a high royalty precedent on Android devices. He said the iPhone maker could garner a deal that's similar to or even higher than the $5 per unit that Microsoft collects on HTC Android devices.
Microsoft's licensing deal with HTC is so lucrative, it's caused some pundits to speculate that the Redmond, Wash., software giant makes more money off of Google's Android than it does from its own Windows Phone 7 platform.
By establishing such a high precedent, Apple's hypothetical licensing fees could constrain other, larger Android device makers like Motorola and Samsung. Those companies are up to 15 times larger, and they have much deeper intellectual property portfolios.
The two patents HTC was said to be infringing upon are also part of a separate lawsuit Apple has filed against Motorola. The company is also suing Samsung for allegedly copying the look and feel of the iPhone and iPad.
An ITC judge ruled on Friday that HTC's handsets illegally violate two patented inventions owned by Apple: U.S. Patent Nos. 5,946,647 and 6,343,263. The judge's initial ruling is still subject to review by the full commission.
A settlement with large royalty payments would put Apple in a position to collect significant revenue from Android device makers. In addition to larger companies like Motorola and Samsung, Abramsky believes that Apple would also be positioned to collect royalties from smaller Asian companies like ZTE and Huawei.
HTC could request that Google revise or remove infringing features from the Android mobile operating system, but such changes would likely require significant time. Because of that, Abramsky believes HTC is more likely to reach a settlement as well.
Both parties can settle at any time, but if HTC were to continue its legal fight, the issue could drag on for years. The full six-judge commission will review the initial ruling by early December, but HTC has already vowed to appeal.
Apple and another rival, Nokia, had an ongoing legal battle with the ITC, in which the commission's staff sided with Nokia in a preliminary review. Apple and Nokia opted to settle out of court, and Apple is now a licensee of Nokia's patents for an undisclosed ongoing fee.
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90 Comments
If these patents are upheld after appeal then a licensing deal would be put in place. Its incredibly unlikely that android devices would be taken off of the market by HTC whilst the investigated a workaround.
It would also set a precedent for Apples patents and they would then seek licensing agreements with other android manufacturers. Apple themselves pay royalties on each iPhone and would allow them to setup cross licensing deals to help counter and reduce the outgoings from current licensing. HTC themselves may find it easier to cross license parents which they recently picked up in their purchase of S3 graphics than to fight the case any further.
At this rate, in another 8-9 years, the only people not making money off of Android phones will be the manufacturers.
Sounds like a phone OS i want to sell!
I'd be very surprised if these patents survive any challenge to invalidate them. I doubt much will come from these patents in the long-term.
I'd be very surprised if these patents survive any challenge to invalidate them. I doubt much will come from these patents in the long-term.
In the long-term as the saying goes, we are all dead. If Apple gets awarded an injunction based on these patents then it won't matter if HTC could conceivably get them invalidated years down the line - HTC will have to license just to stay in the game. Waiting years for invalidation efforts to pay off may simply not be an option.
I'm saying this as somebody who firmly believes that at least the first of these patents ought not be found valid.
Excellent! Apple should continue putting extreme pressure on all of the inferior Android copycats and the illegal copyright infringers. Keep them in a chokehold and do not release until they pay up. I want to see Apple grab all Android bastards by their puny, impotent balls and insert them into a steel vice grip. Apple has every right to protect it's intellectual properties and patents. Anybody who says otherwise is most likely a loser socialist.