Wednesday, May 16, 2012

Apple asks the ITC to throw out five patents HTC received from Google last year

On the ITC document server, a new document entry just showed up that relates to an extremely interesting motion filed yesterday in the investigation of HTC's second ITC complaint against Apple (click on the image to enlarge or read the text below the image):

"Doc Title:Respondent Apple, Inc.'s Motion for Partial Termination of the Investigation With Respect to U.S. Patent Nos. 6,473,006; 6,708,214; 6,868,283; 7,020,849; and 7,289,772 Due to Lack of Standing"

The document itself is confidential. I hope that public redacted versions of that document or (at least) of future documents relating to this motion will become available at some point. But that title, in and of itself, is pretty informative:

"Partial termination of the investigation" is the equivalent of a dismissal with prejudice of claims brought in a federal lawsuit. "Lack of standing" means that Apple says HTC does not have the right to bring an infringement lawsuit in general, or at least an ITC complaint in particular, over those patents.

The five patents listed are patents that HTC added to its second ITC complaint against Apple in early September 2011. I listed and described those patents in >this post. In that post, I wrote:

Even though those patents appear to be related to wireless devices, the fact that HTC just acquired them about a week before its ITC complaint will raise questions in connection with the ITC's domestic industry requirement.

The ITC's domestic industry requirement has a technical and an economic prong and is supposed to ensure that import bans are granted only in cases in which this measure helps to protect the domestic industry against unfair competition from the importation of infringing goods. The ITC (unfortunately) also accepts complaints from non-practicing entities, but NPEs at least have to meet certain criteria in order to satisfy the domestic industry requirement.

By disputing HTC's standing, Apple attacks HTC's assertion of those patents at an even more fundamental level than just disputing the existence of a domestic industry for those patents.

This here is a very interesting issue. Basically, HTC is acting as a Google proxy. Google itself would definitely have been unable to fulfill the domestic industry requirement for those patents, simply because of its business model. Two months after ITC asserted those patents against Apple, Eric Schmidt said the following in Taiwan, where HTC and other Google partners are based (almost all of whom, by the way, pay patent royalties on Android and Chrome to Microsoft):

""We tell our partners, including the ones here in Taiwan, we will support them. For example we have been supporting HTC in its dispute with Apple because we think that the Apple thing is not correct."

Mr. Schmidt didn't explain why it's "not correct" for Apple to insist that others come up with their own inventions. But at any rate, if Google wants to support its "partners" (which will no longer be just partners but also direct competitors if and when Google closes the acquisition of Motorola Mobility) against Apple, it has to bring patent infringement lawsuits in its own name against Apple, as opposed to using someone like HTC as a front. And if they give patents to HTC, the ITC is one venue in which HTC definitely should not be allowed to assert them. Acquiring a bunch of patents in week X and requesting an ITC import ban over them in week X+1 shows that HTC is merely a proxy, and the use of proxies is irreconcilable with the ITC's mission under the applicable statute, Section 337. I guess Apple's motion will be granted.

In other Apple-HTC-ITC news today, some HTC shipments of new devices were seized at customs for further inspection, causing a delay of a couple of product launches -- all of this due to the import ban the ITC ordered last December as a result of Apple's first ITC complaint against HTC. The import ban took effect about a month ago. PC Magazine reports (and quotes my take on this).

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