Posted by Greg Mills

The recent US International Trade Commission finding isn’t the end of the war between Apple’s iOS platform and the Android platform, but drawing first blood may be significant. Had the ruling been related to something trivial like the shape of buttons, for example, HTC could have simply gone to round buttons instead of square buttons.

The particular patents found to have been infringed relate more to basic system organization that underly the very foundation of the Android OS. Further rulings will no doubt find additional infringement on more Apple patents that are even more specifically related to smart phones and mobile operating systems.

I looked up the Apple patents cited and they are so broad, Apple’s attorneys must be delighted. The ITC finding of infringement isn’t just related to HTC, but rather all Android phones. The finding is really more against the Android OS than HTC. See:

An upheld finding that HTC infringed even one claim of one Apple patent is enough to allow Apple to stop the importation of all offending HTC handsets into the Untied States. Of the major Android handset makers HTC has the most narrow product line, mostly smartphones that run Android. That makes the potential of an Android import ban particularly devastating to HTC.

Further hurting HTC is the fact of life for the smartphone industry that while Apple ships roughly 1/4 of all smartphones world wide, the iPhone has enough margin in it to give Apple half the profits of the entire industry. That means HTC survives on a much smaller margin.

The prospect of the entire current product line of HTC being banned from importation into the Untied States and serious damages paid to Apple on top of that, may well crush HTC. Watch for HTC stock to tumble badly next week. Note that the ITC released the finding against ITC after the market closed on a friday.

Going back to the drawing board to design their way around the Apple technology cited so far, may be an exercise in futility as a lot more patents and more litigation lies ahead and Apple has a lot of patents, both issued and pending that get more and more specific in describing Apple’s smartphone technology.

Keep in mind also, that Apple owns a lot of technology they don’t use that is still patented. Let’s say there are 8 ways to do something on a smartphone that Apple discovered, the best way and 7 other ways that for various reasons aren’t preferred. Apple patents all of them, so that even workarounds for the preferred method are also patented. Apple has the resources and legal team to bury the competition with continuing litigation and they can be expected to do just that.

Patents are always written as broadly as possible to protect as much technology as possible. HTC may find that to build an Android smartphone that is cool enough to sell may also infringe on something in Apple’s broad patent portfolio.

The other Android handset makers are in the same boat. Each of them have an Apple Federal Law Suit and complaints filed against them with the ITC as well. HTC was only the first to face the music. Each have vulnerabilities to Apple’s patent portfolio and a each may find critical elements that make up the look and feel of the Android platform in their phones an infringement of Apple’s technology. The uncertainty will be devastating and hard to overcome.

The engineering staff going back to the drawing board to come up with a viable HTC Android handset that doesn’t infringe on Apple technology may well find the obvious solutions to what they have to do blocked by unused but patented Apple technology.

Normally, when a company infringes on another companies technology it is a matter of money to settle the matter with a license issued to use the technology with damages paid for prior use.

Apple is expected to refuse to settle and license iPhone technology to anyone. Apple will just say no. If the Android handset makers can’t illegally use Apple technology and Apple won’t license them to use their patents, all that is left is a complete redesign that avoids infringement. That noninfringing design may well be impossible, not just inconvenient. That is certainly the goal of Apple’s patent attorneys who filed the 200+ patents on iPhone technology.

Should HTC be forced to remove its infringing Android smartphones from the US market, which is sounding quite possible, the company would have to wait it out to know fully what Apple patents will be upheld to avoid further infringement. Apple can be expected to attack again with fresh patents that are only now being issued.

I can’t believe I wrote this, but HCT ought to consider going with Microsoft’s new mobile OS instead of the Android OS. At least that way they would have the advantage of having Microsoft’s patent portfolio protecting them from Apple. Look for Android OS handset makers to begin to migrate away from the Android platform. This will allow Steve Jobs to sleep better and Apple to rule the smartphone market.

I was scratching my head when Apple filed suit against the Android handset makers instead of going after Google directly over the Android OS. While that may come, the individual handset makers are perhaps more vulnerable individually and if Apple can take down all the handset makers, the Android OS will implode. What good is a smartphone operating system if no one dares to sell a handset that will run it? Did you hear a popping noise? Thats Greg’s Bite