Apple wins narrow ruling in patent fight with Android phone maker HTC

In a high-stakes patent battle with potentially significant repercussions for the smartphone industry, the International Trade Commission on Monday sided with Apple (AAPL) and ruled that handset- maker HTC was copying some elements of the iPhone.

The decision, which is subject to a 60-day review by the Obama administration and is likely to be appealed, is an eye-catching if narrow victory for Apple in its complicated legal skirmish for smartphone supremacy with Google (GOOG), maker of the Android software that powers the HTC phones at issue here as well as dozens of others.

Android is now the most widely used mobile operating system, but Apple's iPhone remains the most popular single smartphone. Apple's late CEO Steve Jobs complained to biographer Walter Isaacson that much of Android's technology was pilfered from Apple. "I'm going to destroy Android, because it's a stolen product," Isaacson quoted Jobs as saying. "I'm willing to go thermonuclear war on this."

In Monday's ruling, one of the first cases between Apple and a smartphone-maker using Android, the Cupertino company claimed that Taiwan-based HTC, one of the fastest-growing players in the mobile- phone industry and the No. 3 smartphone provider in the United States, infringed two of the patents governing the technology behind the iPhone. The trade panel found that only one of the patents -- which allows users to tap on a phone number in an email and immediately be connected -- had been infringed by HTC.

The ruling was at least a partial victory for Apple. By prohibiting HTC from importing devices that run the software in question, the commission is essentially telling HTC it must figure out a way around the disputed patent or else stop bringing its phones into the United States. The court gave HTC until April to comply, or else come up with a workaround that would resolve the issue.

In a statement, HTC downplayed the significance of the disputed "data-tapping" feature and said it "will completely remove it from all of our phones soon."

"This it just one more step in a long process," said Bijal V. Vakil, a partner in White & Case's intellectual property practice and executive partner of its Silicon Valley office who was not involved in the case. "This is not a disastrous ruling at all for HTC."

An Apple spokesman could not be immediately reached for a comment.

It's unclear what impact the ruling may have on consumers. One thing is certain: More and more legal rulings will increasingly affect the kinds of smartphones we use. This case was just part of an avalanche of patent litigation in recent years as companies try to legally outmaneuver their competitors in the booming smartphone industry.

After suing HTC in March 2010, Apple initiated litigation with Motorola in October 2010 and with Samsung in April 2011. Just between Apple and Samsung, there are more than 30 lawsuits. Also, Oracle (ORCL) has sued Google, claiming Android violates its patents and copyrights. And Microsoft is suing Motorola Mobility over Android.

Cases often trigger countersuits or pre-emptive legal moves as defendants jockey for competitive advantage. Google, for example, has accused its competitors of "a hostile, organized campaign against Android" being waged through "bogus patents."

With Google's Android system now the most widely used software on smartphones, an order barring or cutting back on the number of HTC phones entering the country would have severe repercussions at the retail level.

But, said patent blogger Florian Mueller, "HTC is not locked out of the market by any means. I'm not sure what their workaround will look like or whether users will notice any change in service as a result. But Apple will have to be much more successful in enforcing its patents in the future. They're still far, far away from Steve Jobs' vow to kill Android."

The case that the six-member trade commission ruled on Monday is complicated. Apple initially accused HTC of infringing 10 patents, but six were dropped for various reasons.

Then in the summer, Apple enjoyed a bit of legal tail wind when an ITC judge issued a preliminary ruling that HTC had infringed two of Apple's patents, including one that covers the technology used to find data in an email, such as a phone number, and then enables the user to automatically dial the number by touching it -- the so- called "data-tapping" feature. The judge's ruling was forwarded to the full commission, which made its ruling Monday.

"This is the one of the first two patent infringement complaints Apple ever brought against Android," said patent blogger Mueller. "It's the first such case in the United States to reach the stage of an actual ruling that is not just a ruling on a motion for a preliminary injunction."

The Apple-HTC patent battle

The dispute: Apple claimed that Taiwan-based HTC, one of the fastest-growing players in the mobile-phone industry and the No. 3 smartphone provider in the United States, infringed on two of the patents governing the technology behind the iPhone

The ruling: The trade panel found that only one of the patents -- which allows users to tap on a phone number in an e-mail and immediately be connected -- had been infringed by HTC.

The next step: The decision, which is subject to a 60-day review by the Obama administration, is likely to be appealed. If it stands, HTC as of April will be prohibited from exporting phones to the United States that include the contested software.