Tuesday, July 3, 2012

ITC investigates Apple's enforcement complaint against HTC -- but no new ban for now

A month ago, Apple filed an enforcement complaint against HTC with the ITC and asked for temporary emergency relief, i.e., an immediate ban of 29 new HTC devices.

There was no reasonable doubt that the ITC was going to investigate the enforcement complaint. It would have been shocking if Apple had not managed to meet the requirements for that. And indeed, the ITC just instituted an enforcement proceeding. The far more interesting question at this stage was whether Apple would also succeed with its request for temporary emergency relief. The ITC denied that one.

In my analysis of HTC's two related letters to the ITC (1, 2 and of an Apple letter, I supported two of HTC's three arguments but got the impression that the GMail client on HTC's Android-based devices continues to infringe the '647 "data tapping" patent.

The denial of temporary emergency action is great news for HTC, but doesn't represent a setback to Apple. Apple was being ambitious and aggressive by pushing for an immediate ban. But I'm sure Apple and its lawyers knew that this was not going to be easy. I wouldn't call it a long shot: given that HTC did not ask the ITC for an advisory opinion (it didn't have to, but it should have), the ITC might have taught HTC and everyone else a lesson by being more willing than otherwise to grant emergency relief. But the hurdle was reasonably high.

Apple knows that you have be patient in patent litigation. Some argue that Apple's patent enforcement against Android devices hasn't been successful since it started more than two years ago with the ITC complaint against HTC that resulted in the order Apple is now seeking to enforce. Still, Apple has made more headway, especially recently, than most observers realized. By now it has already won court rulings (not counting those that have been overturned) that found Android devices to infringe seven of its utility (technical) and two of its design patents. Apple is on the right track, even if not on the fast track, with this overall effort.

The ITC does not explain in detail why it denied emergency relief. It just says that Apple "has not demonstrated the propriety of temporary emergency action" by arguing on the basis of HTC's own representations in the original investigation, concluding that "the facts recited by Apple in its submission do not conclusively demonstrate that HTC's representations were inaccurate at the time that they were made". The ITC also denied Apple's request that HTC be required to post a 100% bond (i.e., a bond covering the total amount of its sales of the accused Android-based devices in the U.S. during the enforcement proceeding). There will be no bond since Apple didn't specify an amount other than 100%.

The next steps in the enforcement proceeding are now for the Chief Administrative Law Judge (Chief ALJ) to assign the case to an ALJ, and for the ALJ to set, no later than in mid-August, a target date for the enforcement proceeding. The target date for completion of the investigation will be four months after the ALJ's Enforcement Initial Determination (EID). For ITC enforcement proceedings, the usual timeline is less than a year. In this case, the enforcement proceeding will have to be handled by a different ALJ than the original case. In the original investigation, ALJ Charneski issued the initial determination in that one. He has since left the ITC to enter private practice. A new ALJ will now have to familiarize himself with the '647 patent and the related issues.

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