Apple 2.0

Covering the business that Steve Jobs built

Apple vs. Google: Inside an Android patent violation

July 16, 2011: 7:45 AM ET

Steve Jobs claimed that Google "stole" this Apple innovation. Last week, the ITC agreed.

When an iPhone receives a message that contains a phone number or an address -- e-mail, Web or street -- those bits of data are automatically highlighted, underlined and turned into clickable links.

Click on the phone number, and the iPhone asks if you want to dial it. Click on the Web address, and it opens in Safari. Click on the street address, and Maps will display it.

Any Android phone will do the same.

Unfortunately for the three dozen companies that make Android devices, Apple (AAPL) filed for a patent on the underlying system and method that performs these actions in 1996. The patent, U.S. Patent No. 5,946,647, was one of 20 that in March 2010 Apple accused HTC, a leading maker of Android phones, of violating.

Competition is "healthy," Steve Jobs said at the time. But competitors should not "steal."

On Friday, a judge at the U.S. International Trade Commission ruled that HTC had indeed violated two of those Apple patents, including '647.

This could be a big one.

HTC has appealed the decision, which could be overruled by a six-member panel. Or Apple might be willing to cross-license the technology to HTC, assuming HTC has any patented technology to trade. Or HTC could find a way around the patent, although with a technique this basic, that might not be so easy.

As FOSS Patents' Florian Mueller puts it:

"Standing in front of the Great Wall of China, you can also vow to walk around it. That doesn't mean it's a viable option."

In the worst-case scenario, assuming the decision prevails, the ITC could ban the import of HTC's Android devices before the end of the year. The company's 2012 U.S. market share, as Mueller puts it, could shrink to 0.0%.

And if HTC violated Apple's patent '647, so probably have all the other Android manufacturers.

By Mueller's count, this case is only one of 49 that have been filed against the Android operating system, which Google (GOOG) created and distributed for free to those three dozen manufacturers without, it would seem, bothering to license all the underlying technology.

Google has been complaining lately that the U.S. patent system is broken -- a problem it might have considered addressing before it launched Android. When CEO Larry Page was asked about the issue during the company's quarterly earnings call last week, he was defiant. "Android is on a tear," he said, according to TechCrunch. "Despite the efforts of some of our competitors."

FOSS Patents' Mueller, as usual, has the most detailed analysis of the HTC case, included a breakdown of the key "claim charts" that Apple filed with the ITC.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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