You Look Silly in This Suit, Apple

Is there anyone who doubts Apple (Nasdaq: AAPL  ) executives who say they lead a mobile device company? There shouldn't be. Earlier today, the iPhone inventor -- "Mac maker" no longer seems appropriate -- sued Taiwan's HTC, claiming it infringed on a number of patents the company says relate to the iPhone.

There are 20 patents specifically at issue, Gizmodo reports. My read of them is similar to what I've seen in other media reports. Apple is claiming that it has patented the basic functions of most touchscreen smartphones, such as the ability to unlock the device with a finger swipe. Its other claims include a patent for an object-oriented graphic system, which sounds a lot like using the principles of modern programming to create a smartphone interface.

What fascinates me is what Apple isn't claiming. The company isn't suing HTC over its patent on multitouch technology, which is interesting, given history. Apple has pointed fingers at Palm (Nasdaq: PALM  ) and others for building devices that functionally resemble the iPhone.

"We can sit by and watch competitors steal our patented inventions, or we can do something about it. We've decided to do something about it," Apple CEO Steve Jobs said in a statement. "We think competition is healthy, but competitors should create their own original technology, not steal ours."

Strong but ironic words, sir. Wasn't HTC first with a touchscreen smartphone? Didn't Apple have to pay Cisco (Nasdaq: CSCO  ) for the right to use the name "iPhone," because the networker had already trademarked said moniker?

I'm at a loss for how this suit accomplishes anything positive for Apple. Instead, what I see is a commitment to use some of the company's $40 billion cash arsenal to fight a courtroom war with a far-flung competitor that's done a reasonable job of creating iPhone alternatives, including the Hero and Google's (Nasdaq: GOOG  ) Nexus One.

You say HTC stole from you, Apple? Fine. Just recognize you're going to fight this battle in the public eye, which means Jobs and Chief Operating Officer Tim Cook will have to explain how the generic-sounding patents referenced in Apple's complaint are the result of innovation. Refuse, and you'll be cast as a bully.

Right now, you're acting like one.

Is Apple hurting itself by suing HTC? How? Make your voice heard using the comments box below.

Apple is a Motley Fool Stock Advisor selection. Google is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He had stock and options positions in Apple and a stock position in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy has a new tux for its red carpet debut.


Read/Post Comments (9) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 02, 2010, at 3:47 PM, jtsnyc47 wrote:

    Wow - great research.

    There's at least 2 patents Apple is claiming were violated that involve multi-touch:

    -7,479,949: Touch Screen Device, Method, And Graphical User Interface For Determining Commands By Applying Heuristics

    -7,469,381: List Scrolling And Document Translation, Scaling, And Rotation On A Touch-Screen Display

    Maybe you don't understand what multi-touch means? Maybe you didn't read the actual filing? You might find it helpful in whoring for hits. Either way, I'm at a loss to explain your horrendous reporting.

    Also, the iPhone had to settle with Cisco - so what? It's a name. Are you really equating defense of IP with the rights associated with a cool-sounding name for a smartphone?

    Lastly, I have no idea what you're opening sentence is supposed to mean, but I imagine the terrible writing is par with the non-existent reporting. Good job, Fool: you're setting the standard for "who to look to" for financial news that matters.

  • Report this Comment On March 02, 2010, at 3:52 PM, jtsnyc47 wrote:

    Nice research. There's 2 patents related to multi-touch. Maybe you don't know what the word means?

  • Report this Comment On March 02, 2010, at 4:45 PM, TMFMileHigh wrote:

    Hello jtsnyc47,

    Thanks for writing.

    >>There's at least 2 patents Apple is claiming were violated that involve multi-touch ...

    No, they are for features available on touchscreen smartphones. Calling these multi-touch patents is specious. This is Apple's multi-touch patent:

    http://www.freepatentsonline.com/7663607.html

    >>Also, the iPhone had to settle with Cisco - so what? It's a name. Are you really equating defense of IP with the rights associated with a cool-sounding name for a smartphone?

    Please tell me you're kidding. You're asserting that Apple's land-grab of a registered Cisco trademark -- an action that forced a lawsuit -- was no big deal? That actually *was* theft, right up to the point that Apple settled.

    Look, I like Apple as much as the next person -- I use the products, I own shares -- but there are times when the company plays a wacky brand of ball. This is one of those times.

    Consider how it notified HTC of the proposed violations. Wait ... it didn't notify HTC. Here's the company's statement, once more from Gizmodo:

    "We only learned of Apple's actions based on your stories and Apple's press release. We have not been served any papers yet so we are in no position to comment on the claims. We respect and value patent rights but we are committed to defending our own innovations. We have been innovating and patenting our own technology for 13 years."

    Maybe Apple has a case; I'm not a patent lawyer so I don't know. But I think it's 100% fair to ask why the core iPhone patent -- the one that governs multi-touch technology -- wasn't involved. Without it, this looks like bullying.

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On March 02, 2010, at 5:06 PM, jtsnyc47 wrote:

    The patent you cite refers more to the technology involved in the screen and is very specific. The most likely reason Apple didn't claim infringement: maybe HTC didn't violate it? The ones Apple cited are the gestures. Concluding that Apple's claims are "bullying" because one of the more technical patents wasn't infringed upon by HTC is weak tea, to be kind.

    And the iPhone name was a "land-grab" by Apple? LOL. It's a name. Did you think Apple didn't know it was Cisco's when they "grabbed" it? Obviously Cisco was compensated for it. Trying to compare the volume of innovation that went into the patents cited by Apple and the coining of the name "iPhone": there's your definition of specious.

    HTC can say what they want about notification. What does this have to do with anything? It's "wacky" because the PR group of the company targeted says WTF? Really?

    Apple claimed they would defend their patents and - lo and behold - they are. This only shocks people who profit by feigning shock.

  • Report this Comment On March 02, 2010, at 8:18 PM, TMFMileHigh wrote:

    jtsnyc47

    >>The patent you cite refers more to the technology involved in the screen and is very specific. The most likely reason Apple didn't claim infringement: maybe HTC didn't violate it?

    Precisely. Thank you for making my point.

    Apple's other claims, while possibly enforceable, are more general and relate to the nature of touchscreens rather than a type of touchscreen technology.

    >>And the iPhone name was a "land-grab" by Apple? LOL. It's a name.

    Tell that to a trademark lawyer. Or, frankly, to Steve Jobs. Here's a look at just two of Apple's trademark suits:

    http://www.chinatechnews.com/2008/12/03/8174-apple-wins-trad...

    http://www.geek.com/articles/apple/apple-takes-on-ipod-trade...

    And, of course, there are the varying battles back and forth with Apple Corps., the company that oversees the rights to The Beatles' collection of hits.

    >>Apple claimed they would defend their patents and - lo and behold - they are. This only shocks people who profit by feigning shock.

    Sorry, but that's naive. This wasn't some well-now-you've-made-me-mad act of last resort. It's gamesmanship designed to throw a rival and the industry off-balance. I don't necessarily have a problem with that as an investor, but let's at least be real about the company and CEO in question.

    Again, thanks for your comments.

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On March 02, 2010, at 9:13 PM, marv08 wrote:

    HTC was not first with a touchscreen smartphone, IBM was first with the Simon in 1992. Apple was first with a smartphone with a 100% multi-touch OS and a 100% desktop-class browser (sans the Flash-thingy). HTCs TouchFlo was only a thin shell providing access to a few select functions - one or two taps into the system, and you were looking at the sheer and unrivaled ugliness of Windows 3.1 (camouflaged as Windows Mobile) and its stylus hell.

    I agree on the Cisco reference and the fact that Apple is looking a bit dull in this role though. We can't really sue Google, we need parts from LG and Samsung, Palm is killing itself nicely, SE is not doing anything remotely competitive... so, let's pick HTC to make our point. Really a bit lame.

    I am not astonished about them NOT using THE touchscreen patent. It (and the acquired FingerWorks patents) might be Apple's strongest weapons - you do not really fire these unless there is no alternative. The 20 patents listed in the claims (well, some of them) are quite specific - do not just judge them by their titles (most commenters made that mistake), there is a lot of meat in there. And no, I have absolutely no clue if HTC is indeed violating anything here. But then, most people commenting today did not even bother to read them (I did and if I read them two more times, I won't be able to recall my name or nationality... this stuff is utterly maddening).

  • Report this Comment On March 02, 2010, at 10:04 PM, jameskatt wrote:

    Apple's strategy of picking off the weakest companies first is a valid one.

    The reason is that this will have Apple's patents validate by a court of law in one case. This can then be applied to bigger and bigger fish - since every win creates a snowball effect.

    The smaller fish eventually cave in and license Apple's technology, giving Apple a piece of their pie. The bigger fish will have to so as well.

    The reason for not suing Google is that Android is given away for free. HTC is the one actually creating a usable cell phone based on Android. This working device is the one that is violating Apple's rights and can be pointed out in court with a working model.

    Android, itself, did not have multitouch until it was added later to an existing phone by modifications.

    If a company using Android wants to steer clear of Apple, all it has to do is to not implement Apple's version of multitouch in Android. It's that simple.

    In any case, the reason patents exist IS TO SUPPORT INNOVATION. Patents, however, do not support copying - which HTC has done. Copying is not progress nor innovation.

    End of story.

  • Report this Comment On March 03, 2010, at 5:39 AM, Melci wrote:

    Hey Tim,

    How about a bit of balance in your reporting?

    You could at least have mentioned all the iPhone-related lawsuits other companies have hit Apple with in recent times, such as Nokia's major suit against iPhone GSM technologies, or Kodak's against the iPhone's camera, or Minerva's or Klausner Technologies visual voicemail suits or St. Clair Intellectual Property Consultants camera suit or Elan Microelectronics against the iPhone's touchscreen etc etc.

    You make Apple out to be the only bad guy in this, but the iPhone litigation all started long before Apple saw fit to initiate any proceedings themselves.

    And how can you say that Apple's swipe gesture to unlock patent isn't absolutely valid against Android's copycat gesture unlock feature or the proximity screen-dimming patent etc.

    Also, Apple has to attack HTC as they are the ones making money directly off of Android's features, but it is Google who will probably have to defend HTC by virtue of Android indemnity agreements.

    And whoever said Apple should only defend particular patents anyway? I think most sane commentators would agree that they should defend whatever patents are most defensible in any given instance.

    ps. Note that Apple only recently defensively counter-sued Nokia after the latter struck first.

    -Mart

  • Report this Comment On March 04, 2010, at 9:34 AM, jtsnyc47 wrote:

    >>The patent you cite refers more to the technology involved in the screen and is very specific. The most likely reason Apple didn't claim infringement: maybe HTC didn't violate it?

    Precisely. Thank you for making my point.

    Apple's other claims, while possibly enforceable, are more general and relate to the nature of touchscreens rather than a type of touchscreen technology.

    ---And your point is what? That the patent you mention is "more important" than the ones Apple is suing for? That Apple should only defend some of its patents? Maybe you could recommend which ones they should defend and which ones they should allow to be pillaged so everyone will be on the same page.

    >>And the iPhone name was a "land-grab" by Apple? LOL. It's a name.

    Tell that to a trademark lawyer. Or, frankly, to Steve Jobs. Here's a look at just two of Apple's trademark suits:

    http://www.chinatechnews.com/2008/12/03/8174-apple-wins-trad...

    http://www.geek.com/articles/apple/apple-takes-on-ipod-trade...

    And, of course, there are the varying battles back and forth with Apple Corps., the company that oversees the rights to The Beatles' collection of hits.

    ---Your references are to infringements on the Apple logo, the name of a shipping product, and the name of the company, respectively. You'd think Apple might want to protect those. Cisco's iPhone trademark, which is no longer associated with a shipping product (try to find one for sale that isn't on eBay), is also the subject of trademark lapse, as noted in this ZDnet piece:

    http://blogs.zdnet.com/Burnette/?p=236

    If Cisco was concerned about the value of their iPhone trademark instead of - say - holding onto the trademark solely for purposes of suing Apple later, they'd probably still be selling an iPhone.

    >>Apple claimed they would defend their patents and - lo and behold - they are. This only shocks people who profit by feigning shock.

    Sorry, but that's naive. This wasn't some well-now-you've-made-me-mad act of last resort. It's gamesmanship designed to throw a rival and the industry off-balance. I don't necessarily have a problem with that as an investor, but let's at least be real about the company and CEO in question.

    ---LOL. Of course its designed to throw competitors off-balance. Competitors that are infringing on patents that have been filed and granted. The practice of defending intellectual property is a part of the landscape of a competitive market. Patents aren't only used as part of a "last resort" strategy. Talk about naive. Don't get me wrong: I love that you're game enough to respond to my comments, but your angle on this is simplistic and uninformed.

    Cheers,

    jtsnyc47

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1125280, ~/Articles/ArticleHandler.aspx, 8/29/2014 1:23:20 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement