Apple 2.0

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Apple wins limited ruling in important Android patent suit

December 19, 2011: 5:46 PM ET

Not the knockout blow Steve Jobs sought; Google has until April to find a workaround

Apple (AAPL) has won a partial victory in an intellectual property case that Steve Jobs had famously vowed to fight to his "last dying breath."

The U.S. International Trade commission ruled Monday that the software in some of HTC's Android smartphones violated one provision of an Apple patent and that those phones would no longer be allowed into the U.S.

But the ruling is not as broad as Apple had hoped, and the import ban doesn't take effect until April, giving HTC -- and Google (GOOG), whose software the phones were running -- time to fashion a workaround.

The announcement was made after the close of markets:

"Notice is hereby given that the U.S. International Trade Commission has found a violation of section 337 in this investigation and has issued a limited exclusion order prohibiting importation of infringing personal data and mobile communications devices and related software. The Commission has determined that exclusion of articles subject to this order shall commence on April 19, 2012." (Via AllThingsD)

According to FOSS Patents' Florian Mueller, who has been closely following the case, the ruling is not the knockout punch Apple had been seeking.

What Apple has won is a formal import ban scheduled to commence on April 19, 2012, but relating only to HTC Android phones implementing one of two claims of a "data tapping patent": a patent on an invention that marks up phone numbers and other types of formatted data in an unstructured document, such as an email, in order to enable users to bring up other programs (such as a dialer app) that process such data. The import ban won't relate to HTC Android products that don't implement that feature, or that implement it in ways not covered by those patent claims.

If Google can implement this popular feature, which users of modern-day smartphones really expect, without infringing on the two patent claims found infringed, this import ban won't have any effect whatsoever.

You can read Mueller's analysis here. For background on the case, see here.

UPDATE: ISI's Brian Marshall offered several "quick thoughts" on the ruling, among them:

  • HTC (#2 Android smartphone vendor after Samsung) has low-20% share of the U.S. smartphone market and has shipped ~44 million units globally over the last 4 quarters (vs. AAPL's ~72 million iPhone shipments)
  • We believe this ruling lends credence to AAPL's view that Android-based phones have infringed on AAPL's intellectual property (IP) and could lead to a stronger position for AAPL in its other cases against Android vendors (e.g., Samsung, Motorola Mobility/GOOG, etc.)
  • With ~$80 billion in net cash, we believe AAPL is not interested in a financial settlement with HTC or other Android vendors but wants to stop the shipment/sale of products that infringe on their vast IP portfolio

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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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