What Apple vs. HTC Could Mean by yfh14810

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									What Apple vs. HTC Could Mean
March 2, 2010
By NICK BILTON

The lawsuit that Apple filed on Tuesday against HTC, the mobile handset maker, opens up a lot
of questions about the future of Android phones like the Nexus One and the cellphone market in
general.

But it could also have an effect on consumers, specifically those who have purchased HTC
Android phones.

Jonathan Zittrain, a professor at Harvard Law School, outlines a similar case in his book “The
Future of the Internet — and How to Stop It.” In 2004, TiVo sued the satellite TV distributor
EchoStar, accusing the company of infringing on its patent on DVR technology. After some
drawn-out litigation, TiVo ended up winning the case, and a Texas judge ordered EchoStar to
disable the DVR functions on most of its set-top boxes. An appeals court is reviewing the matter.

“The judge simply ordered EchoStar to connect to the DVR boxes via the Web and destroy the
functionality,” Mr. Zittrain told me in an interview. “Patent law is a completely different
universe online. That means if the court were to side with Apple and issue an injunction that
insists HTC kill the phone, or at least some of its functionality, they easily could.”

A ruling that would call on HTC to kill the whole phone does seem highly unlikely, especially
given the prominence of the companies involved.

Stephen Lieb, an intellectual property lawyer at Frommer Lawrence & Haug, said courts
had recently moved away from these kinds of injunctions. Now, he said, they take into
account the effect of banning a service or product on the marketplace, and on the public
interest.

“Courts are going to be very careful about crafting an injunction here,” Mr. Lieb said,
“but before we even see this happen, it’s pretty likely that HTC, or even Google, will file a
countersuit.”

Apple has a bigger strategy at work here. It filed its suit with the United States District Court in
Delaware, but also with the United States International Trade Commission, and it could ask the
commission to halt shipments of infringing HTC phones that are coming into the United States.

So why did Apple sue HTC and not Google? Mr. Zittrain believes Apple is simply going after a
less powerful company first, one with much smaller pockets than Google.
“It clearly involves some form of litigation strategy of picking off the weaker members of the
herd first,” Mr Zittrain said. “They can always add Google to the suit later on.”

Many lawyers I spoke with believe this case will end up being settled out of court before it goes
that far.

David H. Levitt, a partner in the Chicago law office of Hinshaw & Culbertso, points to an earlier
case in which Research in Motion, makers of the BlackBerry, were sued by a patent owner and
lost the case. Mr. Levitt said questions arose about whether “BlackBerry owners were going to
have their phones shut down as a result of R.I.M.’s patent infringement.” In the end R.I.M.
settled.

“These cases can last many years, sometimes 5 or 10, and can be extremely costly,” Mr. Levitt
said. “It’s much more cost effective to settle.”

Eric Von Hippel, a professor of technological innovation at M.I.T.’s Sloan School of
Management, noted that “only 5 percent of these types of cases actually go through the judicial
system.” Even for a company like Apple, he said, they are just too expensive.

Mr. Von Hippel also said that these lawsuits pointed to a bigger problem with the patent system.
“It’s a bad scene right now. The social value of patents was supposed to be to encourage
innovation — that’s what society gets out of it,” he said. “The net effect is that they decrease
innovation, and in the end, the public loses out.”

								
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