HTC Wins Dismissal of Patent Lawsuit Due to False Statements

HTC Corp. (2498), the Taiwanese maker of Desire, Sensation and One smartphones, won a court ruling dismissing a patent infringement case against it after a judge found the inventor made false declarations to patent officials.

U.S. District Judge William T. Hart in Chicago yesterday ruled that Daniel Henderson, the founder of Intellect Wireless, made false statements to the U.S. Patent and Trademark Office to overcome prior art, or previous references, cited in opposition to elements of his patents.

Henderson claimed HTC infringed patents covering technology allowing a wireless device to receive and display caller identification, pictures, video messages and multi-media messaging services.

“This case presents not just one instance of a false statement, but a series beginning in August and December of 2006,” Hart wrote in his opinion. The declarations were “clearly intended” to defeat the prior art claims and were not “withdrawn, corrected” or pointed out to patent examiners before Henderson’s patents were issued, Hart wrote.

Raymond Niro, a lawyer representing Henderson in the case, didn’t immediately return e-mail and phone messages seeking comment on the ruling after regular business hours yesterday.

HTC, based in Taoyuan City, is trying to keep up with Apple Inc. (AAPL) and Samsung Electronics Co. (005930) after competition halved its global market share to 4.5 percent in the first quarter from a 10.7 percent peak in the second quarter of last year, according to data compiled by Bloomberg Industries. It recovered some ground in the second quarter, increasing to 5.8 percent of shipments.

HTC’s sales have missed analyst estimates for the last four quarters, according to data compiled by Bloomberg. Last month, the company forecast third-quarter revenue that was as much as 22 percent below the average estimate.

The case is Intellect Wireless Inc. v. HTC Corp., 09- cv-02945, U.S. District Court, Northern District of Illinois (Chicago).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

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

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