Bloomberg News

Apple Seeks to Block Import of Newest HTC Phones, Tablets

June 06, 2012

Apple Seeks to Block Newest HTC Phones From Import Into U.S.

Apple wants the commission to have all HTC products that run on Google Inc. (GOOG)’s Android operating service blocked from the U.S. until the enforcement case is resolved. Photograph: Landov

Apple Inc. (AAPL:US) filed an enforcement action at the U.S. International Trade Commission in Washington, seeking an emergency order that would block imports of HTC Corp.’s (2498) newest phones and tablet computers.

HTC had been ordered by the commission to remove a function patented by Apple for data-detection technology if it wanted to continue selling its mobile phones in the U.S. Apple contends products including the HTC One X, HTC One S, HTC EVO 4G LTE phones and Flyer tablets continue to infringe its patent even after an exclusion order was issued in December.

HTC, Asia’s second-largest smartphone maker, is counting on its One series of phones to improve its share of a market that reached $312 billion last year, according to Bloomberg Industries data. The company had 4.5 percent of the global smartphone market in the first quarter, down from a peak of 10.7 percent in the second quarter of 2011, as it lost to competition from Apple’s iPhone and Samsung Electronics Co.’s Galaxy line.

“HTC has worked long and hard to get itself back on track and this is aimed at what everyone looks at as a new beginning with the One series,” said Will Stofega, an analyst at IDC in Framingham, Massachusetts. “HTC has been having a rough patch and this is them getting kicked again.”

Stopped at Border

Some HTC products were stopped at the U.S. border last month, delaying plans by Sprint Nextel Corp. (S:US) to sell the HTC EVO 4G. U.S. Customs and Border Protection allowed the products, made in Taiwan, to enter the U.S. after assurances by HTC that the devices weren’t infringing the Apple patent.

“HTC has completed the review process with U.S. Customs and HTC devices have been released, as they are in compliance with the ITC’s ruling,” the Taoyuan, Taiwan-based company said in an e-mailed statement today.

Apple wants the commission to have all HTC products that run on Google Inc. (GOOG:US)’s Android operating service blocked from the U.S. until the enforcement case is resolved. It also asks the agency to force HTC to remove any products from store shelves that it imported in violation of the exclusion order.

“The commission allowed HTC four months to either negotiate a license with Apple or to remove the infringing functionality from its Android devices,” Apple said in the complaint. “HTC did neither.”

Android Battle

Cupertino, California-based Apple said that if such an order isn’t imposed, HTC otherwise should be required to post a bond equal to the value of each imported product, or at least $290 for each device, Apple said in the filing dated June 4.

“HTC’s market share for Android phones is the most significant part of their business,” said Makan Delrahim of Brownstein Hyatt in Los Angeles, who specializes in patent and trade issues. “If Apple got an order to remove those from the shelves, that would be as significant as it comes.”

Apple filed its initial complaint against HTC in March 2010, the first salvo in the iPhone maker’s legal battle against devices that run on Android. It has since become embroiled in litigation with Samsung and Motorola Mobility Holdings Inc., which became a Google unit last month, over their Android products.

In February, HTC lost a patent-infringement case it filed against Apple. Both companies have filed new patent complaints against each other at the trade agency.

The newest case is In the Matter of Personal Data and Mobile Communications Devices and Related Software, Complaint No. 2900. The earlier case is In the Matter of Certain Personal Data and Mobile Communications Devices and Related Software, 337-710. Both were filed at the U.S. International Trade Commission (Washington).

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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