Friday, October 7, 2011

Google and T-Mobile ask the ITC not to ban HTC's Android devices as requested by Apple

After a federal court accepted Verizon's and T-Mobile's amicus curiae briefs in support of Samsung against Apple's request for a US-wide preliminary injunction against four Android-based devices, a new round of please-don't-ban-letter-writing took place yesterday with Google and, again, T-Mobile making a public interest argument against an Apple complaint:

The maker of Android and the iPhone-less carrier responded to the ITC's routine request for input on public interest considerations that might dissuade the U.S. trade body from imposing an import ban on HTC's Android-based devices in the event that an ongoing review affirms in whole or in part an Administrative Law Judge's initial determination that HTC's Android devices infringe two Apple patents.

The ITC is currently on a December 6, 2011 deadline for its decision on this matter. Both companies put a fair amount of effort into those public interest statements. T-Mobile's statement is 14 pages long (twice as long as the amicus brief it submitted in support of Samsung). Google's brief has 80 pages (61 of those are exhibits). Both are profoundly concerned about the impact of an import ban against HTC on Android as whole, and point to Apple's enforcement activities against Samsung and Motorola (at the ITC and in federal courts) in this context.

T-Mobile asks the ITC to deny an import ban even if an infringement is found. As a second-best alternative, T-Mobile would like the ITC to "allow a four-to-six month transition period [...] so that T-Mobile and the rest of the industry could change to other devices without harming U.S. consumers". Google doesn't propose a transition period: it categorically opposes a ban.

T-Mobile's argument: déjà vu

T-Mobile raises some of the arguments that it made in support of Samsung -- the usual 4G LTE story, just without emphasizing the Christmas Selling Season since an ITC decision would likely come at a time when that season is almost over and resellers have their warehouses fully stocked with HTC products anyway. T-Mobile rejects the notion that it could replace HTC's products with other offerings and, in a footnote, makes reference to Apple's suggestion (in its own public interest statement, which obviously advocated a ban) that HTC could alternatively sell devices running Windows phone:

"Tellingly, not even Apple’s own suggested substitutes for HTC Android smartphones include Android smartphones from other manufacturers. In its Statement Regarding the Public Interest (August 25, 2011), Apple identified only alternative operating systems to Android, such as its own iOS for iPhone, Blackberry OS, and Microsoft Windows."

T-Mobile suggests that consumers who want Android generally won't consider other alternatives and also recalls that "unlike Verizon, AT&T, and Sprint, T-Mobile does not carry any version of Apple's iPhone smartphone". However, that is something that probably wouldn't change during the proposed four-to-six-month transition period, and T-Mobile's ongoing campaign against Apple's lawsuits doesn't make it more likely.

The filing underscores the close relationship between T-Mobile and HTC, and their joint early commitment to Android:

"HTC is one of T-Mobile’s main strategic partners. In fact, HTC and T-Mobile were Android pioneers together. T-Mobile partnered with HTC and Google Inc. to launch the first Android phone, the T-Mobile G1 smartphone, in September 2008, which provided HTC with a foothold in the U.S. smartphone market."

Google's argument: without Android, Apple would have a monopoly; Android is open, so please let it infringe

The gist of Google's public interest argument is that Android is a necesssary "open" and customizable alternative to Apple's platform, and that this consideration should trump intellectual property considerations.

In order to underscore Android's openness, Google points to Amazon's independent Android app store:

"For example, the Android platform supports not only Google's Android Market service, but also alternative distribution channels such as application marketplaces operated by large technology companies like Amazon as well as amateurs with programming skills and an Internet connection."

Google's statement propagates a very selective memory of the late Steve Jobs, quoting a few things he said about Apple's control over its platform.

Google warns against the potential effect of an import ban removing an important competitive force:

"Apple is the largest seller of mobile computing devices in the U.S. [...] Allowing this supplier to eliminate the competition from a fast-moving, maverick competitor (HTC) could drive up prices, diminish service, decrease consumers' access to the technology, and reduce innovation."

The word "maverick" reminds me of Senator McCain's presidential election campaign. In a footnote, Google clarifies this label:

"For example, HTC introduced several new features in the mobile device industry that have proved particularly important to U.S. consumers. HTC was the first manufacturer to offer devices in the U.S. that included capabilities like 4G networking, 3D video-recording and
playback, and built-in social network integration for services like Facebook and Twitter."

There's no doubt that HTC has had a number of interesting ideas and made some very good decisions. Otherwise it wouldn't have become such a major global consumer brand in such a short time. However, that doesn't mean that its products are irreplaceable, and that there would be a severe absence of competition in the market without its Android-based products.

Google goes on to claim that the greatest benefit HTC and Android provide is to prevent "Apple from becoming an entrenched monopoly".

Obviously, Google's apprehensions go way beyond HTC:

"Eliminating all of the major Android device manufacturers from the U.S.—as Apple is attempting—would allow Apple to establish a virtual monopoly in the mobile device industry. Consistent with its Congressional mandate, the Commission should consider not only the likely harm to competition and U.S. consumers from the exclusion of the devices at issue in this investigation, but also the potential damage that could result from the combined effects of the Commission’s remedies in the multiple investigations concerning Android devices."

Google then touts Android's (very debatable) openness:

"Excluding HTC Android devices from the U.S. would threaten the only open mobile platform developed and distributed in the U.S."

As usual in such a public interest argument, the issue of public health and welfare (including emergency response) comes up. Here's an example:

"For instance, during the recent Hurricane Irene, Google observed that search queries related to hurricane tracking, preparation and recovery were much more likely than other queries to have been made from a mobile computing device. Notably, search queries related to “power outages” made from mobile computing devices were particularly high the day after Hurricane Irene made landfall."

The statement also stresses Android's use by the U.S. military, with a particular reference to General Dynamics Itronix' products. Yes, that's the same Pentagon contractor that took an Android-related patent license from Microsoft a few months ago.

Toward the end, Google's statement sums up the public interest argument this way:

"An exclusion order will likely raise the price of mobile devices to U.S. consumers, diminish the variety of devices available, lower the number of consumers that have access to the critical public health and welfare benefits of mobile computing, reduce innovation in the mobile device industry, reduce the development of critical wireless network infrastructure, lower the number of mobile applications created, raise barriers to entry, and threaten the only open mobile computing platform. The following specific features of the mobile device industry further increase the harm to the public interest, consumers, and competitive conditions that would result from an exclusion order directed to the HTC Android devices: (1) it is still emerging and fragile; (2) there is an applications barrier to entry that protects incumbents; (3) there are relationships between device manufacturers and network providers that could create additional public harm by discouraging network development; and (4) there is only one open, generative platform with the potential for transformative innovation."

All of that sounds great, but I doubt that it will persuade the ITC that patent infringement can be justified with the benefits of a competitive marketplace. There needs to be a balance between intellectual property and competition, and neither Google's nor T-Mobile's statement says how and where that balance should be struck. Both just advocate a free pass for Android.

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