Apple Accuses HTC of Patent Infringement but are Google and the Nexus One the Real Targets?

March 3, 2010 - By Justin E. Gehrke

March 3, 2010 – In technology-related legal action yesterday, Apple Inc. (AAPL) filed suit against fellow smartphone manufacturer, HTC Corporation (HTCXF), alleging patent infringement. Divided into two separate cases, the first filing was initiated with the U.S. District Court in the State of Delaware, for ten Apple patents relating to the globally popular iPhone. The second case, alleging another ten instances, was filed separately with the U.S. International Trade Commission (ITC). Specifically, Apple alleges that HTC, through the production of the Google Nexus One smartphone, has knowingly used previously patented technology relating to the iPhone touch-screen controls, software, and hardware.

While industry opinions are sharply divided, the case underscores the increasingly difficult task faced by state and federal governments in establishing what can be patented at all, as well as the limits to which a company can extend its intellectual property umbrella. For its part, Apple adamantly defended their right to protect what they consider to be protected technology. In an official Apple Press Release, CEO Steve Jobs was quoted as saying, ““We think competition is healthy, but competitors should create their own original technology, not steal ours.” The press release goes on to include data showing the meteoric rise of the iPhone’s popularity, since its initial introduction in 2007. Citing that more than 40 million iPhone have been sold that now support in excess of 150,000 iPhone applications, Apple may have gone out of their way to make sure the general public understands the company is just trying to protect what is they consider to be their hard-earned success.

Filing suit against HTC, though, may only be a precursor to an even larger battle on the horizon. Though HTC is the manufacturer of the Nexus One smartphone, their alliance with Google in developing and marketing it may be at the real heart of the issue. As the popularity of the Google Nexus One, as well as the number of applications developed for the Android platform, continues to rise, so may the likelihood of additional allegations of patent infringement. For this reason, some believe Apple is choosing an indirect path to go after Google, in the same manner that Microsoft, who through one of their subsidiary holdings, lodged an antitrust complaint against Apple, with the European Union. A ruling in favor of Apple could result in halt in production and sales of the Nexus One. Alternatively, it may only be a matter of time before Apple goes directly after Google and the Android platform, in an effort to achieve the same goal and secure its technological dominance, even if only temporarily.

While Apple may be the instigator of legal action in today’s events, they aren’t the only company scrambling to protect their technological interests. In a similar filings in January, both Eastman Kodak Co (EK) and Nokia (NOK) filed separate complaints against Apple, over a number of privately held patents. The Eastman Kodak Co also included BlackBerry manufacturer, Research in Motion Ltd (RIMM), as a plaintiff, in their complaint. Nokia’s complaint included allegations of hundreds of millions of dollars in lost, annual royalties, based on Apple’s alleged patent infringement. The only thing that seems certain is that, as the similarities in smartphone technology and functionality continue to increase, the number of complaints by competing manufacturers is only like to continue to rise.