The Behind The Scenes Story Of Apple’s HTC Lawsuit

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Apple’s HTC lawsuit is the first public manifestation of a series of private warnings Apple has been issuing to handset makers for a while now, says Yair Reiner of Oppenheimer in a note for clients, picked up by Philip Elmer DeWitt.

Here’s the story:

  • In January 2009, Tim Cook said on an earnings call, “we will not stand for having our IP ripped off and we’ll use whatever weapons we have at our disposal.”
  • LG, Samsung, and Nokia, etc. thought that warning meant stay clear of multi-touch. So they did. Notable exception — Palm, which Philip Elmer DeWitt writes “didn’t represent a strategic threat to Apple.” (Ouch!)
  • At the end of 2009, the Motorola Droid and the HTC Eris appeared with multi-touch capability.
  • Other handset makers waited to see Apple’s reaction. If it didn’t stop either company, then the handset makers would assume it was OK to use multitouch.
  • Apple’s chief officers began telling other top level mobile phone manufacturers in January that it was not happy with these multitouch phones.
  • Says Yanir, Apple let the world know it “was ready to press its case along a number of axes that had made the iPhone experience unique, from the interpretation of touch gestures, to object-oriented OS design, to the nuts and bolts of how hardware elements were built and configured.”
  • Then Apple filed suit against HTC because it was the highest profile Android partner and served as the best proxy for Apple’s real enemy — Google.

The effect of the warnings, and the lawsuit, are huge, says Yanir.

  • Until now, smartphone makers were trying to match Apple’s user experience, and not thinking about patents. Now all the companies are checking patents before proceeding.
  • Says Yanir, “We believe a lot of software and hardware is being sent back to engineering departments for work-arounds.”
  • Apple’s legal actions have “temporarily left competitors playing catch-up with their shoelaces tied.”
  • Even prior to the lawsuit, some handset makers were cooling to Google because it released the Nexus One. Post-lawsuit, handset makers are wondering if Android is the best way to topple Apple.
  • That’s leading to a renewed interest in partnering with Microsoft, and its new Windows Phone Series 7. 

See Also: The 20 Patents Apple Hopes Will Crush Its Smartphone Competition