Are Apple's rivals planning a nasty surprise?
(MoneyWatch) COMMENTARY Of all the possible features Apple (AAPL) might introduce in tomorrow's launch of the iPhone 5, one high on people's wish-list is that it offers so-called LTE functionality. The technologies behind this 4G mobile broadband standard would mean much higher data transmission rates. That is critical to iPhone users, who tend to be much heavier data users than owners of competing smartphones. And as carriers build LTE, or "long-term evolution," networks, consumers will begin to expect such capabilities.
However, there may be a nasty surprise for Apple should the company announce LTE support. Samsung and HTC, both of which have found themselves on the losing side of an Apple patent infringement lawsuit, will reportedly sue the company for allegedly infringing their LTE patents. Google (GOOG), which owns Motorola, also probably has its own assortment of patents. If any do take legal action, Apple might find itself wishing it hadn't raised the bar on legal patents.
Success in patent litigation depends on having enough patents in key areas of technology to catch someone out on at least one claim. In the current round of patent disputes, Samsung, HTC, and Motorola were at a disadvantage. Apple had amassed some serious patent protection on key aspects of a touch-driven smartphone. But these companies' greatest strength is in the underlying technology that made cell phones work.
Yet part of the deal for this technology to be broadly adapted by the telecommunications industry was for patent holders to make it broadly accessible under what is known as fair, reasonable and non-discriminatory terms, or FRAND. They couldn't ice out Apple because their patent blocks formed so-called standard essential patents, or SEPs.
LTE patents are in a different category, and Samsung officials have reportedly told the Korea Times that Apple could well become a target of patent action. Although Apple has access to 400 LTE-related patents from the Nortel portfolio that it bought along with Microsoft (MSFT), Sony, Research in Motion (RIM), EMC (EMC), and Ericsson (ERIC), Samsung supposedly has 800 patents, and if it has cross-licenses with any of the companies listed, it might possibly be covered from a countersuit on the LTE front.
In addition, there are rumors that HTC will sue Apple over alleged infringements of its LTE patents. Motorola holds a significant number, although the biggest LTE patent holder appears to be LG. And, again, cross-licensing could protect these companies from infringments that could not be designed around as easily as an interface issue.
Interestingly, Apple and Google are rumored to be negotiating patent licenses. One could only hope that the immense waste of resources and attention that could have gone into improving already existing products might soon come to an end.
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