Apple scores partial win in phone patent dispute

SAN FRANCISCO - A federal agency is siding with Apple and ordering an import ban on HTC phones that infringe on a patent belonging to the iPhone maker.

The U.S. International Trade Commission said Monday that the ban will take effect April 19 so that wireless carriers will have time to adjust their plans. The ITC said in a final ruling that HTC Corp. may import some refurbished phones to offer customers as replacements under warranties and insurance plans. HTC, which is based in Taiwan, is a major maker of phones that use Google Inc.'s Android operating software.

International Trade Commission order

Apple Inc. had initially complained about HTC violating several of its patents in April 2010, though the commission narrowed its decision down to just one patent. The patent in question deals with data detection, enabling smartphone functions such as the ability to tap on a phone number or address contained in an email to immediately call the number or find the address on a map.

It's not immediately known which phones are covered by the ban. In an e-mailed statement, HTC general counsel Grace Lei said the patent in question affects a small part of the user experience and it will soon remove it from any affected phones.

Apple spokeswoman Kristen Huguet reiterated an earlier statement, saying competitors should create their own technology. The case is part of a broader dispute involving Cupertino, Calif.-based Apple, HTC and other phone makers. In federal courts and before the ITC, companies have been accusing one another of stealing ideas for popular phone features. While the courts can award damages, the commission has the power to block imports of products and parts made with contested technology.

The U.S. International Trade Commission issued an initial ruling in October that Apple's iPhone does not violate four patents owned by HTC, a blow to the company.

The patent in question, 5,946,647 was granted in 1999 and covers identifying data "having recognizable structures," such as a "phone number, post-office address, e-mail address, and name." Then, the patent says, a "parsing process" will allow "appropriate actions" to be taken.

The latest development is nevertheless a blow to HTC, which has made strides in building market share and a brand with its line of Android-powered smartphones, many of which feature the company's own Sense user interface. HTC was the first Android supporter that Apple chose to target, signaling the growing threat of Google's software to iOS and the iPhone franchise.

Apple did not immediately respond to a request for comment. In a statement made when the complaint was originally filed, then-Apple CEO Steve Jobs, who died this fall, said: "We think competition is healthy, but competitors should create their own original technology, not steal ours."

Technology companies in recent years have increasingly used the ITC to settle their disputes because the process is seen as more efficient than the federal courts. In addition, the threat of an embargo on products typically forces companies to settle more quickly.

HTC is considered the most vulnerable legally of the Android partners because it lacks a robust portfolio of patents that act as a potential shield. HTC this year purchased S3 Graphics, largely because of a collection of patents that could be used against Apple.

In September, HTC launched its legal counterattack against Apple in Delaware federal district court, using nine patents that originally came from Palm, Motorola, and Openwave Systems. Google transferred the rights to HTC on September 1. (A separate, earlier effort before the ITC was unsuccessful, according to an initial ruling in October.)

HTC created the first Android smartphone, the G1, and has seen its profile rise over the past few years. The company was also the first target of an Apple lawsuit related to Android, and is among the most deeply entrenched in litigation over the topic.