Bloomberg News

Apple Found to Violate One Patent on Android Phones

April 24, 2012

IPhone 4S models at an Apple Store in Beijing on Jan. 13, 2012. Photographer: Andy Wong/AP Photo

IPhone 4S models at an Apple Store in Beijing on Jan. 13, 2012. Photographer: Andy Wong/AP Photo

Motorola Mobility Holdings Inc. (MMI:US) won a partial U.S. International Trade Commission judge’s ruling in its bid to block imports of Apple Inc. (AAPL:US)’s devices including the iPhone and iPad tablet computer.

Apple violated one of four Motorola Mobility patent rights being contested, ITC Judge Thomas Pender said in a notice posted today. The patent relates to 3G technology. The other three patents weren’t violated, according to the notice. Pender’s findings are subject to review by the six-member commission, which can block imports that infringe U.S. patents.

The findings, along with a separate determination yesterday in a Motorola Mobility patent case against Microsoft Corp. (MSFT:US), are part of a global fight in a mobile-device market Yankee Group projects will expand to $360 billion this year. Google Inc. (GOOG:US) has said its $12.5 billion purchase of Motorola Mobility and its trove of patents may protect it against litigation by rivals to its Android operating system.

“These are long wars, and it’s one more battle in the war,” said Carl Howe, an analyst with Yankee Group. “It’s about accumulating as much intellectual property as possible. It’s not good for innovation if you do that, but that seems to be where we’re heading.”

Apple Confident

The six-member commission is scheduled to complete the investigation by Aug. 23. Should it decide an import ban is warranted, that decision is subject to review by both President Barack Obama and an appeals court that specializes in patent law.

“A court in Germany has already ruled that Apple did not infringe on this patent, so we believe we will have a very strong case on appeal,” Kristin Huguet, an Apple spokeswoman, said in a telephone interview, referring to the one patent Apple was found to have violated.

Apple slid $11.42, or 2 percent, to $560.28 at 4 p.m. in Nasdaq Stock Market composite trading. Motorola Mobility fell 29 cents to $38.14 at 4:15 p.m.

“We are pleased that the ALJ’s initial determination finds Apple to be in violation of Motorola Mobility’s intellectual property, and look forward to the full commission’s ruling in August,” Becki Leonard, a spokeswoman for Motorola Mobility, said in an e-mailed statement.

IPhone, Android

Motorola Mobility filed the complaint Oct. 1, 2010, amid statements by Apple that phones running on Google Inc.’s Android operating system copied the iPhone. Android has become the most popular platform for mobile devices.

Apple, which had $108.2 billion (AAPL:US) in sales last year, has denied infringing Motorola Mobility patents and challenged their validity. The patent it was found to have violated covers industry-standard technology and Motorola has refused to license it to Apple on reasonable terms, Huguet said.

The European Union is investigating complaints by Microsoft and Apple that Motorola Mobility is unfairly using standard- essential patents to block competition.

Patent lawsuits over smartphone technology were filed on four continents, with a dozen at the ITC alone. Companies are fighting for an added share of a market that researcher Gartner Inc. said rose 47 percent in the fourth quarter. Cupertino, California-based Apple has pending ITC complaints against Android-phone makers HTC Corp. and Samsung (005930) Electronics Co.

Google Acquisition

Apple lost its own ITC case, filed Oct. 29, 2010, in which it sought to block imports of Motorola Mobility’s Android phones. Apple is appealing the decision.

Google, based in Mountain View, California, agreed to buy Motorola Mobility after the case was filed and will inherit the dispute once the deal is completed. European and U.S. regulators have approved the acquisition, which is under review by Chinese authorities.

The patent that was found to be infringed covers a way to eliminate noise so signals are clearer. A Wi-Fi patent is invalid because it doesn’t cover a new invention, the judge said. No infringement was found on two other patents, for a way the server tracks which applications are available, and a sensor to determine the proximity of a person’s head to the phone so it doesn’t accidentally hang up or dial unwanted numbers.

Pender’s full decision will be posted after both sides get a chance to redact confidential information.

ITC Judge David Shaw said yesterday that Microsoft was infringing four other Motorola Mobility patents, including three that read on Wi-Fi and video-decoding standards. If the commission agrees, it could block imports of Microsoft’s Xbox gaming system.

Smartphone Market

Apple had 29 percent of the smartphone market in 2011, compared with less than 8 percent for Motorola Mobility, according to researcher Strategy Analytics. When it comes to operating systems, the Android platform had 55 percent, Apple held 29 percent, and Microsoft’s Windows Phone had about 3 percent.

Android was introduced on handsets to further Google’s advertising business and is provided free to device makers including Motorola Mobility, Samsung and HTC. (2498) Apple’s operating system, which it developed, is available only on Apple products.

The case against Apple is In the Matter of Wireless Communication Devices, Portable Music and Data Processing Devices, Computers and Components Thereof, 337-745, and Apple’s case against Motorola Mobility is In the Matter of Mobile Devices and Related Software, 337-750, both U.S. International Trade.

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net


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Companies Mentioned

  • MMI
    (Marcus & Millichap Inc)
    • $24.25 USD
    • 0.49
    • 2.02%
  • AAPL
    (Apple Inc)
    • $98.97 USD
    • 1.30
    • 1.31%
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