Lawsuits are flying fast and furious among handset manufacturers, and a lot of the paperwork is coming out of Apple (AAPL). Today, Apple announced that it was suing HTC. Apple's filings are part of the intellectual-property dance that most technology companies do, and it suggests a reason why CEO Steve Jobs hasn't wanted to do anything with the $40 billion his company has in the bank. But Apple is late to the handset game and may be more vulnerable to retaliation than many think.
One problem facing Apple is that no matter what innovation you create for handsets, they still rest on patent-protected fundamental technology and have enormous wells of prior art waiting for litigants to peruse. Many companies have been gunning for Apple because of its iPhone success, and a good number of these companies have a significant backlogs of patents of their own. HTC alone has over 100 patents granted in the U.S., and that's nothing. Nokia has 7,921 U.S. patents, and you know a huge portion of them are related to handsets. And then there are the "friends and family" view. Two of HTC's business partners are Google (GOOG) and Microsoft (MSFT).
Not only could those companies offer resources to help tie up a major competitor, but they have their own intellectual property that could tie Apple up, either in the handset market or in some other area. Nokia is suing Apple over wireless technology. Kodak is also suing Apple. Microsoft's own multitouch patent application is still in play, as it was filed before Apple's, and over time that could turn into an entirely different level of court battle.
It's not that Apple can or cannot win these suits. The problem for the company is that it's not even close to guaranteed success, and the more patent infringement balls it has to juggle in the air at any one time, the more likely management will find itself distracted. And that would be just fine with Google or Microsoft, because it makes the company a less effective competitor -- at exactly the time that Apple must concentrate on getting market acceptance for the iPad. But then, corporate legal action is so often about things happening far outside a court.