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Apple wins Android patent suit

Dec. 19 (Bloomberg) -- Apple Inc. won a final patent-infringement ruling that bans some HTC Corp. smartphones from the US, bolstering efforts to prove that devices running the Google Inc. Android system copy the iPhone.

The US International Trade Commission’s ban would take effect April 19 and is subject to appeal by HTC and a review by President Barack Obama that may delay enforcement. The commission said in a notice today that it found HTC’s Android phones infringed a patent related to data-detection technology, completing a review of a judge’s findings in July.

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The ruling is the first definitive decision in the dozens of patent cases that began to proliferate in 2010 as smartphone makers battle over a market that Strategy Analytics Inc. said increased 44 percent last quarter from a year earlier to 117 million phones worldwide. Apple has been the most aggressive in its legal efforts, trying to slow the growth of Android devices, including those made by Samsung Electronics Co. and HTC.

HTC, the second-largest maker of Android phones, used its partnership with Google to help transform itself from a contract manufacturer founded in 1997 in Taoyuan, Taiwan, to the biggest US smartphone seller in the third quarter. HTC generated about $5 billion in US sales last year, according to a separate patent complaint it filed at the trade agency against Cupertino, California-based Apple. That’s more than half of HTC’s $9 billion (NT$275 billion) in global sales last year.

Among the HTC phones at risk of being blocked from the US are the Nexus One, Touch Pro, Diamond, Tilt II, Dream, myTouch, Hero and Droid Eris, according to Apple’s original complaint.

IPhone 4s, Galaxy

HTC phones accounted for 24 percent of the US smartphone market in the third quarter, based on shipments, Palo Alto, California-based researcher Canalys reported Oct. 31. Samsung held 21 percent of the market, and Apple 20 percent. The market is volatile, and the Apple iPhone 4s that went on sale in October and Samsung’s newest Galaxy phone are likely to change the rankings for the fourth quarter.

Apple contended in its complaint that the HTC phones infringed four patents. Administrative Law Judge Carl Charneski in July sided with Apple for two of the patents: one for a system to detect telephone numbers in e-mails so they can be stored in directories or called without dialing; and the other covering the transmission of multiple types of data. The judge determined that the remaining two patents weren’t infringed.

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The six-member commission, a quasi-judicial arbiter of trade disputes with the power to block products that infringe US patents, chose in September to review Charneski’s findings.

‘Destroy Android’

Apple has a second complaint pending before the commission that claims other HTC smartphones and Flyer tablet computers infringe five patents related to software architecture and user interfaces. Apple also has cases before the trade commission and in district courts against Samsung and Motorola Mobility Holdings Inc., which Google agreed to acquire in August.

The fight can be traced back to a decision by then-Chief Executive Officer Steve Jobs in March 2010 to file the HTC case, the first patent complaint by a device maker targeting Google’s Android operating system. Jobs, who died Oct. 5, made it his mission “to destroy Android,” which he said “ripped off the iPhone, wholesale,” according to Walter Isaacson’s biography of the Apple founder.

HTC has retaliated with two trade commission cases against Apple, one submitted last year and one in August. HTC lost a preliminary ruling by a judge in the case filed last year, a decision that the commission is now reviewing. The other two cases have yet to be decided. S3 Graphics Co., a company HTC agreed to buy in July, also has two commission cases against Apple, one of which Apple won last month.

Google, which hasn’t been named in any of the Apple cases, denies copying the iPhone and said in a filing that Apple is trying to control the US smartphone market through litigation.

Mobile Advertising

HTC’s Android devices “are helping prevent Apple’s iOS from becoming the sole viable mobile platform and thus ‘locking in’ consumers and software developers to that platform,” Google said in the Oct. 6 filing.

Google’s Android accounts for about 70 percent of the smartphone operating systems used in the US, according to Canalys. Mountain View, California-based Google licenses Android to handset makers for free as a way to further its business of selling display and search advertising on mobile devices.

Google’s share of this year’s estimated $2.1 billion US mobile-ad market will expand to 24 percent from 19 percent in 2010, Framingham, Massachusetts-based researcher IDC said Dec. 13. Millennial Media Inc.’s slice may climb to 17 percent from 15 percent, and Apple’s will decline to 15 percent from 19 percent.

The case today is In the Matter of Certain Personal Data and Mobile Communications Devices and Related Software, 337-710, US International Trade Commission (Washington).

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