MoneyWatch Tech

Apple Gets a Second Setback in Its Smartphone Patent War

By Erik Sherman

Updated on: November 4, 2010 / 2:03 PM EDT / MoneyWatch

Apple (AAPL) has been going tit-for-tat on the patent infringement suit front. The company is trading lawsuits with Motorola (MOT), HTC, and, of course, Nokia (NOK). The latter is where the current outbreak of smartphone IP trench warfare started.

In big US high tech patent action, there are often both federal and International Trade Commission suits, as the ITC can forbid the importation of goods it finds to infringe on a patent. And it's at the ITC that Apple has received two pieces of bad news so far this week.

ITC staff have sided with Nokia, saying that the Finnish handset giant shouldn't be found liable for infringing Apple patents because "the evidence will not establish a violation." Furthermore, the ITC just voted to investigate Motorola's complaint against Apple, although it hasn't yet agreed to look at the countersuit. It's far from saying that Apple will lose. With bilateral suits at both the ITC and in federal court and with a large number of patents in total, neither side should feel comfortable. However, it's certainly not good for CEO Steve Jobs.

The current state of action in the ITC is confusing at best, and the many early media pronouncements that the ITC had "taken" Nokia's side were a bit simplistic. As consultant and free and open software activist Florian Mueller noted, the patents to which the ITC staff referred are only some of the total in question. Because Apple is also in litigation with HTC and Motorola, the ITC decided to partly consolidate the cases. (Nokia and HTC wanted full consolidation and Apple opposed any.)

There were five patents in common in Apple's suits against both Nokia and HTC. And so, the court left those five patents in the HTC suit (which also addresses others) and had Nokia join that action. That left four additional patents that Apple asserted against Nokia, and those are the four to which the ITC staff referred. Even at that recommendation, the presiding judge need not follow the staff's advice.

Even if the judge dismisses that action, there is still a long way to go:

Nokia and HTC face a group of patents that Apple has asserted in the ITC action.
Apple faces both the Nokia and HTC ITC suits.
Unless the ITC decides to investigate Motorola as well, that particular fight will be one-sided. However, as Apple's action was more recent, it is likely that the current silence on investigating Motorola is simply a recognition of the speed of bureaucracy.
There are all the federal court actions still in play.

No one is safe yet. It's just that the pressure on Apple has ratcheted up a bit. The real pressure comes into play when the ITC and district court take up the company's multi-touch patents. I agree with Mueller that Apple's big hammer in this is likely to be its multi-touch patents.

There's just one problem that I've brought up before: It's not clear that the multi-touch patents can stand scrutiny. Multi-touch interfaces were around long before Apple used them, and there is also a strong argument that the company didn't mention some pertinent prior art that it would have known about, as the author of the work in question is an Apple developer. It could be that Apple wins big at the end. Then again, it might be that Jobs finds that the user interface lock he thought he had isn't there.

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Image: Flickr user Feline Groovy, CC 2.0.