Faultline: Apple case against HTC could be the defining patent case for touch Mar 6, 2010 – By Rethink Research
We must admit that the issue of Apple patents in interface design is rather a
vexatious one and it is so because of how patent law tends to work. While we
have said in our opinion that Apple is caught dead to rights in dealings with
Nokia, that may not be the case with HTC, the object of the latest Apple
legal action, and that will strike at the heart of Google more than anyone
else, and the emerging Android devices.
If Apple and Nokia slug it out for a year or so, and if it turns out that
Apple really cannot make a phone at all – GSM or 3G or 4G –
without paying Nokia royalties, it may settle for a patent swap, and license
its own multi-touch designs to Nokia. This is something that Apple could get
turned over on in deals with Qualcomm and Ericsson as well. But few other
companies can claim that they have an essential patent that has the power to
stop Apple selling the iPhone if not licensed.
Even if Apple paid a reasonable fee to these companies (they have promised
they would be reasonable and consistent in order to get them to be part of
these standards) then Apple might find itself relieved of no more than $1
billion, in a worst case. It has so much money that this would not hurt the
Apple share price – well perhaps jot, but not much.
But in the case of HTC, Apple can initially refuse to license its technology
(even though that’s what patenting is all about) or would settle either
in or out of court for an amount considered sufficient to remedy the
situation. Of course HTC is fronting the Android efforts and has made almost
half of the Android devices out there. Motorola would then be the natural
next target for Apple if it was truly hunting its potential nemesis in Google
Android.
Any jury setting awards would have to consider how much more the device was
worth for having these patents. That’s not to say for having a touch
screen, because Apple has invented no part of the touch screen – it
buys those from others. This is just the multi-touch patent. So touch, the
ability to recognize gestures and the process by which touch was picked up
– capacitive or resistive – have no part in this equation.
Typically that comes down to the highly specific use that Apple has put touch
to, which its own main patent describes as “a scrolling heuristic for
determining that the one or more finger contacts correspond to a
one-dimensional vertical screen scrolling command rather than a
two-dimensional screen translation command based on an angle of initial
movement of a finger contact with respect to the touch screen display”
The truth is that even this patent, awarded a year ago by the US patent
office would eventually come under scrutiny because other patents awarded
outside the US have not been consulted prior to awarding it, and there is a
complex layering of touch patents going back to the 1960s starting with
single touch screens and driving on to the development of touch screens for
phones, played with in the early 90s and triggered in 2007 with the launches
of the LG Prada first and later the Apple iPhone.
There have been phones with touch screens as far back as 1992, but always
they relied on single touch to trigger an activity. The idea that the
processor first looked at the angle at which your finger arrives, whether or
not another finger arrives virtually at the same time, and calculates what
outcome you want from both of their movements (such as the pinching movement)
is all new. But it is not only down to Apple.
Taiwan chip designer Elan Microelectronics sued Apple in the US a year ago
saying that it owned the rights which allowed the detection of the finger on
a touchscreen or touchpad. It seems odd that Apple can successfully sue for
its gesture controls, when it relies on other technologies on which it
doesn’t pay any royalties.
Elan won a similar legal action against Synaptics, a company that has set
itself up as the alternative to the Apple gesture controls and which has its
own gesture patents – albeit they are slightly different from the
actual commands that Apple has settled on.
We have to ask ourselves, if all touch handsets want to have pinch and zoom
and all the other Apple commands, then perhaps the Apple invention is
significant, because it becomes the de facto standard. But if alternative but
similar approaches are just as good, then there is a huge body of work in
gesture control acting as prior and parallel art to Apple’s work.
Blackberry and Sony both claim to each have multi-touch patents, Microsoft
has some patents in the area and even a French company Stantum has said it
has a complete set of gesture controls.
GestureTek clearly has patents in this area and has licensed them to both
Microsoft and Sony, but here it has taken gesture into 3D areas, so that the
device can “see” gestures and this is what Sony put into its Eye
Toy about five years ago before Apple considered making its own phones. This
idea of 3D gestures is definitely coming. We talked last week about Texas
Instruments offering a technology demonstrator whereby finger movements on
projected images could be used for controls and rumors this week are that
Apple plans to use non-touching gestures as controls in subsequent iPhone
generations.
So clearly who owns patents in this areas is going to become increasingly
complicated.
The simplest outcome would be that everyone agreed to a patent pooling of
touch screen and gesture patents that are essential to making a phone work,
and then split a set royalty between those companies. This is, for instance,
how MPEG codecs are licensed. GSM phone technology is licensed in a similar
way except companies like Qualcomm refuse to join such patent pools and went
and did their own deals, above and beyond the pools. 3G has a patent pooling
effort, but it can be sabotaged by any one of the major patent holders at any
stage. LTE has had a more coordinated effort, whereby if a technology
supplier refused to license through a patent pool, then the standards body
picked a different technology.
In the absence of a patent pool, the whole thing becomes court bound and
opportunistic, and everyone just uses whatever technology they like, and buys
very little in the way of patent licenses, and hopes for the best.
It would be tough to prove that Apple invented any gesture controls, despite
being awarded a patent, but the fact that it is the Apple controls that
everyone wants to copy, gives it a special position in this debate, and while
we tend to think the Nokia’s of this world are immune, smaller, less
patent rich, Android-supporters are not so immune.
Which is perhaps why Apple has gone after HTC not for a single patent, but
for 20, all related to the iPhone user interface. The lawsuit was filed with
both the US International Trade Commission and in US District Court in
Delaware.
We don’t think the Nokia case, either way around, will ever see the
inside of a courtroom and Apple will eventually settle and it will give Nokia
a huge advantage in bringing gesture controls to market. The case is Nokia on
the attack and Apple on the defensive. But this HTC case may be far more
significant for Apple, in terms of keeping its direct copycats out of the
market and off Android, and this could be the case that goes on to define
licensing for these patents among all the smaller handsets vendors.
Faultline: Apple case against HTC could be the defining patent case for touch
