Smartphone wars: ITC clears Apple in HTC/S3 patent case

Apple [AAPL] has won yet another significant battle against its litigious iOS copycats, with the International Trade Commission (ITC) declaring the company did not violate patents owned by S3 Graphics.

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ITC investigation ‘terminated’

That’s a big deal. S3 Graphics is now owned by HTC, which acquired the company and its patent portfolio for $300 million in July this year.

The commission reversed its own preliminary ruling in which it declared some Apple products had indeed violated S3 patents involving texture compression, as used in 3D. (Specifically, US Patent No. 6,658,146 directed to systems and methods for compressing images and US Patent No. 6,683,978).

Having reversed that decision, the ITC has declared its investigation "terminated" [PDF], dashing the hopes of the HTC Bold manufacturer.

The brave and the bold

HTC and Apple have a series of outstanding litigation between them. This litigation is part of what is believed to have driven HTC’s purchase of S3 in the first place, as that company attempted to shore up its case against Apple. That attempt now having failed, it can’t look too good for HTC in terms of achieving victory elsewhere.

HTC General Counsel Grace Lei said: "We are disappointed, but respect the ITC’s decision." HTC may appeal against the decision.

Apple, Microsoft, Google and Android device makers have been racing to acquire patents to protect their smartphone and tablet offerings in recent months, as the battles between all these parties for the future of mobile devices intensifies.

At present, litigation between Apple and others seems to be moving slowly in the iPad/iPhone manufacturer’s favor: Samsung has been forced to change its product in many markets, or remove them from sale entirely; HTC has lost its S3 graphics case.

The ITC should rule in a separate dispute between HTC and Apple in December. The preliminary decision so far has been that HTC violated two Apple patents — will this also be reversed?

Will Apple gun for Google next?

It is open to question as to Apple’s next move. as it slowly prevails in many of its worldwide cases, will it eventually feel it has sufficient judicial support to chase after its true foe, Google, for the imitative elements it has identified within the Android OS?

Apple’s departed co-founder, Steve Jobs, famously promised to "destroy Android", as he felt many of its ideas had been taken from Apple in what he felt to be a vast betrayal of trust.

In a sense, Google should take responsibility for those patents it has used without permission within the Android OS. In doing so it hasn’t just exposed itself to criticism, it has exposed its manufacturing partners to the risk of legal attack.

With Apple now prevailing in many of the outstanding cases, it is only a question of time until the mud cast at Cupertino by Google and its allies will be washed away, leaving the search giant clearly exposed for failing to pay adequate regard to copyright or intellectual property matters.

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These complaints are not new. In its time the company has seen similar accusations from book publishers, the music industry, shopping and price comparison websites and search engine competitors.

Meanwhile, Amazon’s Fire continues to attract value-conscious consumers, despite the string of negative reviews. With Amazon set to introduce a low-cost smartphone next year, Apple and Amazon seemingly have many Android partners held within a painful, litigious, highly-competitive and not especially profitable vice.

This game can only lead to industry consolidation. Smaller smartphone players will consume each other; some big names will quit the market, and Apple will hit many players right between the eyes with the release of the iPhone 5 next year.

A bump in the road, or a death knell for the Android army? you decide — and state your case in comments below…

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Smartphone wars: ITC clears Apple in HTC/S3 patent case


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