Apple Sues HTC on iPhone Patents, But Google is the Real Target

On March 2, 2010, Apple, Inc. (NASDAQ: AAPL) filed two lawsuits against High Tech Computer Corp.(PINK: HTCCF) (aka HTC Corp.), HTC (B.V.I.) Corp, HTC America, Inc. and Exeda, Inc. HTC Corp. is a Taiwanese corporation and the parent company of the other defendants. According to a statement from Apple, HTC is infringing “20 Apple patents related to the iPhone’s user interface, underlying architecture and hardware.” According to Steve Jobs, Apple’s CEO, “[w]e 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. We think competition is healthy, but competitors should create their own original technology, not steal ours.”  The Apple press release and complaints make it clear that this dispute if about the “revolutionary iPhone®.”  Some have started speculating that because of this Jobs comment the matter is personal and perhaps Apple is whining in an unjustified fashion.  Let’s not kid ourselves though.  The big target here is Google NASDAQ: GOOG) and a patent battle of epic proportions may well be unfolding.  Given that Apple has sold over 40 million iPhones worldwide, if they do believe there is infringement they can hardly let Google muscle in on this lucrative technology turf.

According to the Apple press release, the lawsuits were filed concurrently with the U.S. International Trade Commission (ITC) and in the United States District Court for the District of Delaware, a popular venue for patent litigation and widely regarded in the industry as one of the top patent courts in the country. I can’t really know for certain why Apple chose the District of Delaware, but I can speculate. Apple is not a Delaware Corporation, rather they are incorporated under the laws of the State of California. HTC is incorporated in Taiwan, with its BVI division in the British Virgin Islands. HTC America is incorporated in Texas with its principal place of business in the State of Washington, and Exedea is incorporated in Texas, where it also has its principle place of business. So it would seem that California or Texas would have more corporate contacts to the dispute, but that is not terribly relevant to jurisdiction and venue when large multi-national corporations are involved.

Obviously, Delaware is the center of the universe for corporations, but there is no logical corporate ties on the surface. What the District of Delaware does offer, however, is tremendous experience with large corporate litigations of all types, including patent litigations. As many in the patent space know, the Federal Circuit has little if any problem supplanting the hard work of district court judges and interjecting their own opinions and point of view, even when a de novo review is not legally appropriate. The Federal Circuit has also been known to change the standard of review in particular cases so they could do whatever they wanted, see for example Lough v. Brunswick, particularly the dissent of Judge Newman who was joined by Judge Rader, starting at page 4.  This is relevant and not just a gratuitous stab at the Federal Circuit because as patent litigators know, the District of Delaware is rarely reversed on any issue by the Federal Circuit.  So perhaps Apple has chosen to fight in Delaware because they do plan on fighting and they want a decision to be reached.  So if Apple were to declare patent war for real, fighting in Delaware is one of the places that an all out war would make sense to fight.

According to Tara Williams, an experienced patent litigator with Law Offices of James Scott Farrin, this lawsuit could well be one to keep an eye on. “It’s interesting to watch a patent infringement suit unfold between two large technology companies who each have substantial interests at risk. Apple v. HTC in the iPhone/smartphone world will be one of those. With much at stake, Apple will devote much to developing a strategy, a strategy which is currently uncertain to outside observers,” Williams said. She went on to point out that “large defendants are usually willing to expend large sums to defend their turf, so the fight is on.”

I have not seen the ITC filings, but courtesy of Docket Report, the daily newsletter that collects dozens of district court filings in the patent world, there were actually two lawsuits filed by Apple against HTC on March 2, 2010. Both were filed in the United States District Court for the District of Delaware. In the first Apple complaint,  Apple is listed as a plaintiff along with NeXT Software, Inc., which is a wholly owned subsidiary of Apple. In the second Apple complaint, it is Apple alone listed as the plaintiff.

In the first case Apple alleged infringement of the following Apple patents:

1. US Patent No. 5,481,721 – Method for providing automatic and dynamic translation of object oriented programming language-based message passing into operation system message passing using proxy objects
2. US Patent No. 5,519,867 – Object-oriented multitasking system
3. US Patent No. 5,566,337 – Method and apparatus for distributing events in an operating system
4. US Patent No. 5,915,131 – Method and apparatus for handling I/O requests utilizing separate programming interfaces to access separate I/O services
5. US Patent No. 5,929,852 – Encapsulated network entity reference of a network component system
6. US Patent No. 5,946,647 – System and method for performing an action on a structure in computer-generated data
7. US Patent No. 5,969,705 – Message protocol for controlling a user interface from an inactive application program
8. US Patent No. 6,275,983 – Object-oriented operating system
9. US Patent No. 6,343,263 – Real-time signal processing system for serially transmitted data
10. US Patent No. RE 39,486 – Extensible, replaceable network component system

In the second case Apple alleges infringement of the following Apple patents:

1. US Patent No. 5,455,599 – Object-oriented graphic system
2. US Patent No. 5,848,105 – GMSK signal processors for improved communications capacity and quality
3. US Patent No. 5,920,726 – System and method for managing power conditions within a digital camera device
4. US Patent No. 6,424,354 – Object-oriented event notification system with listener registration of both interests and methods
5. US Patent No. 7,362,331 – Time-based, non-constant translation of user interface objects between states
6. US Patent No. 7,383,453 – Conserving power by reducing voltage supplied to an instruction-processing portion of a processor
7. US Patent No. 7,469,381 – List scrolling and document translation, scaling, and rotation on a touch-screen display
8. US Patent No. 7,479,949 – Touch screen device, method, and graphical user interface for determining commands by applying heuristics
9. US Patent No. 7,657,849 – Unlocking a device by performing gestures on an unlock image
10. US Patent No. 7,633,076 – Automated response to and sensing of user activity in portable devices

Speculation has already started to rise, not surprisingly, that the real target of Apple is none other than Google, who is the creator of the Android operating system that seems to be the foundation of the allegedly infringing technologies.  According to MacRumors.com, a Google spokesperson told them: “We are not a party to this lawsuit. However, we stand behind our Android operating system and the partners who have helped us to develop it.”  Very interesting that a comment would be made when Google is not even a party to the lawsuit.  It seems to me either this spokesperson spoke out of turn or Google knows they are the ones really in the Apple cross-hairs, which would suggest that this may well be more than posturing on the part of Apple and this may really be the declaration of patent war.