As I reported in this week’s Newsweek, Apple’s “thermonuclear war” on Android smartphone makers has been fizzling out lately. Most of Apple’s legal claims have been tossed out, and the two minor victories Apple has scored were so trivial that opponents could work around the claim by making minor changes to their products.
But a person close to the situation tells me there’s a rumor going around among the lawyers that Apple spent $100 million just on its first set of claims against HTC.
Who knows if it’s true, but if so, Apple didn’t get a lot for its money.
Apple brought the case against HTC with the International Trade Commission in February, 2010. Apple wanted the ITC to block HTC from importing products into the United States.
Apple’s case against HTC started out with 84 claims based on 10 patents. But by the time the case got to a judge only four patents were involved.
The final ruling was that one patent was totally invalid because of prior art, and should never have been issued to Apple. On two other patents, the ruling was that HTC was not infringing on the patents, and, worse yet, that Apple itself was not using those patents in its own product, which means Apple had no right to seek an injunction based on them. (ITC injunctions are intended to protect “domestic industry,” and to get one you need to show that you are “practicing” the patent that you claim someone else is infringing.)
On the last patent the ITC found that HTC was infringing and that Apple was practicing the patent.
That got reported as a victory for Apple. But in reality the infringement involved a relatively tiny software feature, one that lets you press on a phone number in an email or Web page and bring up a menu from which you can choose to call the number, send a text message, and so on.
HTC can resolve the infringement simply be removing that feature from phones it sells in the United States, or by finding a different way to implement that feature that sidesteps the patent.
So Apple started out with 10 patents — presumably its best ones — and ended up with a tiny victory on just one. Was that worth $100 million?
Apple certainly can afford the legal fees, and shows no sign of letting up.
Apple has a second complaint against HTC pending at the ITC, involving other patents, with a ruling expected by March 2013. Both of these cases, the one that’s been ruled on and the one that is pending, have also been filed with district courts in the U.S., though those cases have been stayed pending the outcome of the ITC cases.
HTC has two claims pending against Apple with the ITC as well, the first one due for a decision next month and the second in April 2013. And then there are other claims, all over the world, against HTC, Samsung and Motorola.
But all of those guys are now suing Apple as well. Apple already got its ass kicked by Nokia and had to pay royalties for infringing on Nokia patents.
Eventually everyone is going to settle. (Steve Jobs may have wanted to drive Android out of existence, but that’s probably not going to happen.) The question is what kind of terms will everyone get in these settlements. The court fights are really just a way of jockeying for position and trying to gain leverage for the great settlement that is yet to come.
In that sense, whatever Apple is spending on legal fees is probably money well spent.