HTC loses IP fight over transmission chip patent infringement

HTC now must work with Qualcomm to correct the infringing component or else face a U.S. ban

When legal historians look back on this era in intellectual property cases, it might make sense to label time period “The Cell Phone Wars.” Samsung and Apple have been dueling in court for a while now, but they’re not the only mobile device companies that have engaged in IP-related litigation. Apple has also gone toe-to-toe with Motorola as well as patent trolls, while Samsung has also tussled in court with display maker LG.

Now, however, the fight shifts to two other phone makers: HTC Corp. and Nokia Corp. A recent International Trade Commission (ITC) ruling claims that HTC infringed on two Nokia patents relating to technology that enhances the transmission and reception of phone calls.

Although only older phones were named in Nokia’s complaint, many HTC devices, including the HTC One, use the same banned technology, according to The Wall Street Journal (WSJ). As a result, HTC must return to the drawing board and attempt to work with Qualcomm Inc. on altering a chip in the company’s HTC One smartphone.

Although Google and Samsung hold the majority share in the smartphone market, Nokia and HTC are each battling to become major players. In September, Microsoft purchased Nokia with the goal of becoming a bigger factor in the smartphone market. HTC, meanwhile, saw rising profits between its first IPO in 2002 and the 2012 fourth quarter.

However, losing U.S. market share due to patent concerns would be a major blow to the company’s operations. According to the WSJ, the U.S. accounts for 20 percent of the company’s overall shipments. That means resolving the Nokia case — whether though changing its phones or convincing the ITC to reverse its judgment through appeal — is of the utmost importance.

The ITC will decide whether to uphold its initial ruling in January 2014. HTC said the company will “keep its alternative plans ready to ensure no business disruption” in case the commission keeps the ruling in place.

Contributing Author

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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