HTC’s backup plan vs Apple: Its S3 acquisition

Yesterday’s victory in the ITC courts may have seemed like good news for Apple in giving it the upper hand against its Android carrying foe.  But, even if the ITC courts hold up the ruling on Apple’s two broad ranging patents from the mid-90s, likely won’t be able to stop HTC from selling its popular Android line in the US.  HTC has a recently acquired ‘Ace in the Hole’…

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Perhaps sensing (SWIDT?) yesterday’s ruling, HTC purchased S3 for $300 million earlier this month.  S3 of course, is fresh off an ITC patent ruling where it won (you guessed it) two patent disputes with Apple.

On July 1, a U.S. International Trade Commission judge ruled that Apple infringed on some of the claims contained in two S3 Graphics patents. Judge E. James Gildea found that Apple infringed on U.S. Patent No. 6,658,146 directed to systems and methods for compressing images and U.S. Patent No. 6,683,978 directed to image data formats, both of which belong to S3 Graphics.

It isn’t clear which of the patent portfolios carry more weight or which violations are more severe but in the end, it looks like patent strength can be bought and sold.

As to the validity of Apple two above patents being used against other Android vendors, it is uncertain whether or not other Android makers have (or will have to purchase) portfolios (vs. licensing from Apple) that can stand up to Apple’s patents in ITC court.

As noted by the LATimes, these patents were filed more than a decade before Steve Jobs came up with the iPhone –indeed they were filed before he was back working at Apple.

The first one, 6,343,263, was filed in August 1994 — 17 years ago — and covers “Real-time signal processing system for serially transmitted data.”  Meaning, roughly, it handles data (“voice, facsimile, video and the like”) being sent to it from other devices over a network.  There is no mention in the patent of wireless networks, cellular phones or really anything you’d directly associate with a smartphone except the sending and receiving of data.

You can imagine that many — or all — smartphones would need to be able to receive and process real-time data from outside sources, so whether Apple’s infringement claim on it will stop at HTC, or Android, or anywhere, seems to be an open question.

The patents are so broad in scope to computing that not only is Android vulnerable, but so is every other smartphone OS.  In fact, any OS or computing device could fall under these two patents.  Luckily US patents expire 17 years after they are issued so….

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