HTC Bids to Block Imports of IPhone, IPad

HTC Corp. (2498), Asia’s second-biggest maker of smartphones, filed a patent-related complaint at the U.S. International Trade Commission that seeks to block imports of Apple Inc.’s iPhone, iPad and Mac computers.

The complaint filed yesterday in Washington claims Apple is infringing three patents related to wireless technology and follows a case lodged last year at the ITC that made similar claims. Taoyuan, Taiwan-based HTC also sued Apple this week in federal court in Wilmington, Delaware, over the three patents.

“Apple needs to stop its infringement of our patented inventions in its products,” HTC General Counsel Grace Lei said in a statement. “We are taking this action against Apple to protect our intellectual property, our industry partners, and most importantly our customers that use HTC phones.”

The two companies are part of a larger battle among smartphone makers looking to fight copycats and thwart competition in a market that’s projected to reach $206.6 billion this year by researcher IHS Inc. Apple, the world’s biggest smartphone maker, has filed patent cases against handset makers using Google Inc. (GOOG)’s Android operating system, including Samsung Electronics Co., Motorola Mobility Holdings Inc. and HTC.

“Competitors should create their own original technology, not steal ours,” Kristin Huguet, a spokeswoman for Cupertino, California-based Apple, said in response to the HTC lawsuit.

Earlier this week, Google moved to protect itself from lawsuits related to Android with a $12.5 billion agreement to buy Motorola Mobility. The acquisition would give Mountain View, California-based Google at least 17,000 more patents.

S3 Graphics

HTC also has used acquisitions to bolster its position, agreeing in July to buy S3 Graphics Co. after an ITC judge found that Apple’s Mac OS X computer system violated two S3 patents.

HTC, which said in its latest complaint that it generated about $5 billion in U.S. sales last year, claims Apple infringes a patent for portable devices that integrate features of a personal digital assistant and two patents related to networking to better combine telephones and video services.

The company targets the iPhone, iPad, iPod, Mac computers, Apple TV and the AirPort and Time Capsule wireless-network equipment.

The ITC is a quasi-judicial agency that arbitrates trade disputes and has the power to block imports of products found to violate U.S. patents. The agency typically takes 15 to 18 months to complete reviews, and HTC’s lawsuit in Delaware would likely be put on hold if the commission investigates the complaint.

Open to Discussion

A judge with the ITC is scheduled to release his findings in the earlier HTC case against Apple in September.

Last month, a different trade judge found that HTC infringed two Apple patents. If that decision is upheld, it could lead to an import ban on certain HTC phones. Apple filed a separate complaint this month targeting HTC’s phones and new Flyer tablet computers.

HTC and Apple “have to sit down and figure it out,” HTC Chief Financial Officer Winston Yung said in a July 26 telephone interview. “We’re open to having discussions,” he said.

Apple fell $2.93 to $380.48 at 4 p.m. New York time in Nasdaq Stock Market trading. HTC gained 1 percent to NT$834 as of 9:03 a.m. in Taipei.

The ITC case is In the Matter of Certain Electronic Devices with Communication Capabilities, Complaint No. 2841, U.S. International Trade Commission (Washington). The civil case is HTC Corp. v. Apple Inc. (AAPL), 11-cv-715, U.S. District Court, District of Delaware (Wilmington).

To see the patents, click: 7,765,414; 7,672,219; 7,417,944.

To contact the reporters on this story: Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net; Susan Decker in Washington at sdecker1@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net Allan Holmes at aholmes25@bloomberg.net

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