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Watch out, Apple: HTC ruling could hurt your patent income

You might want to reconsider chasing patents that dissolve in court – expert

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Apple may review its patent licensing and enforcement strategy in light of a ruling by the UK's High Court last week, an expert has said.

On 4 July the High Court ruled that three European patents that Apple sought to rely on in legal proceedings against HTC were invalid and that the Taiwanese device manufacturer had not been guilty of infringing on a fourth patent.

Technology law expert Luke Scanlon of Pinsent Masons, the law firm behind Out-Law.com, said that the ruling could affect the income Apple receives through patent licensing. This, he said, was in spite of Apple enjoying some success in winning infringement cases across Europe. Courts in some EU countries, such as Germany, investigate infringement matters separately from claims of patent validity, but Scanlon said the US firm was not immune from losing bigger battles on issues of validity in those countries.

"Strategically Apple now needs to re-assess the worth of pursuing patent infringement claims across Europe," Scanlon said. "Apple might conclude that it would be better to extract a lower licensing fee from some of their competitors rather than risk further findings that their technology falls short of the patentable standards."

One of the patents that the High Court held as invalid was for 'unlocking a device by performing gestures on an unlock image'. Apple utilises a 'slide to unlock' feature on its iPhone device that, when used, enables users to access the functions of their device. The High Court had said that HTC's 'Arc unlock mechanism' would have infringed Apple's patent had Apple's invention not been "obvious".

To qualify for patent protection inventions must primarily be new, take an inventive step that is not obvious and be useful to industry, amongst other criteria governing patentability.

Mr Justice Floyd said Apple's 'slide to unlock' technology was not patentable partly on the basis that a mobile device first introduced into European markets in 2004, Neonode N1, had featured an unlock mechanism. He said Apple had simply developed the Neonode feature using existing technology it also knew about, which included a "slider" created by Microsoft.

"I consider that it would be obvious to the skilled team, faced with the lateral-swipe arrow unlock of Neonode, that it could be improved by the provision of feedback," the judge said. "The skilled team would be aware that visual feedback for a lateral gesture could be provided by the extremely familiar sliders from his common general knowledge, such as [Microsoft's] Windows CE slider."

"It is true that this simple improvement was not done by Neonode. This is a secondary consideration which may in some circumstances support a case of inventiveness. On its own, which it would be in this case, it is of little weight," he said.

Mr Justice Floyd also ruled that Apple's patent for 'portable radio communication apparatus using different alphabets' was invalid on the grounds that it was obvious. The judge said the patent covered the use of "multilingual" keyboard button inputs.

Apple's 'touch event model' patent, which covers technology that recognises when portions of a device screen were activated by single or multiple finger touches, was also ruled invalid by the judge. Mr Justice Floyd said the patent was obvious.

Apple's patent for 'portable electronic device for photo management' was not deemed invalid, but HTC was found not to have infringed on it. The patent covers technology that enables device users to manipulate the positioning of a "zoomed-in image" on their screens. The judge said, though, that the way HTC's photo application, Gallery, allows users to move images when they reach a "dead stop" on their screen was different to what the patent protects.

"In zoomed-in mode in HTC's Gallery, the user can drag the image around the screen," he said. "Panning all the way to the edge results in the image coming to a stop. No area beyond the image is shown, and the movement does not reverse. Once this dead stop point has been reached, however, further gestures will allow movement to the next photo, or return, in the same manner as with the full screen mode and depending on whether the gesture exceeds the threshold or not."

"Apple focus on the steps after the photo has hit the dead stop. They are right to do so, as the gesture which causes the image to arrive at the dead stop plainly does not result in the display of an area beyond the edge. However, once again, these steps in the HTC Gallery do not do anything in response to the display of a previously hidden edge. At the commencement of the claim's first gesture the edge of the image is aligned with the edge of the screen. There is therefore no infringement in zoomed-in mode either." Mr Justice Floyd said.

"The finding of non-infringement seems to me simply to reflect the fact that the patent is not directed to full screen mode, and in zoomed-mode claims a specific way of reacting to the fact that the edge has been reached during a gesture. HTC's method in zoomed-in mode reacts to the fact that the edge has been reached in a significantly different way," the judge said.

Luke Scanlon of Pinsent Masons said: "It is one thing to lose infringement claims. It is quite another to have found that your patents are invalid."

"The court's opinion moves in the direction of breaking down at least some of the many barriers to entry which impact on mobile device markets in the UK," he added.

Copyright © 2012, Out-Law.com

Out-Law.com is part of international law firm Pinsent Masons.

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