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March 4, 2010

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Apple sues HTC for infringing patents

APPLE Inc has sued Taiwan's HTC Corp, which makes touchscreen smartphones using Google software, accusing it of infringing 20 hardware and software patents related to the iPhone.

Even though the suit did not name Google Inc as a defendant, Apple's move was viewed by many analysts as proxy for an attack on the Internet company, whose Nexus One smartphone is manufactured by HTC.

"I think this is kind of an indirect lawsuit against Google," said Kaufman Bros analyst Shaw Wu.

Apple's suit was filed with both the United States International Trade Commission and the US District Court in Delaware on Tuesday, and seeks to prohibit HTC from selling, marketing or distributing infringing products in the US.

The complaint filed with the ITC cited Google's Nexus One, which was launched in January, and other HTC phones such as the Hero, Dream and myTouch - which run on Google's Android mobile operating system - as infringing products.

In a statement, a Google spokeswoman said: "We are not a party to this lawsuit. However, we stand behind our Android operating system and the partners who have helped us to develop it."

HTC said in a statement that it was looking at the filings.

"HTC values patent rights and their enforcement but is also committed to defending its own technology innovations," spokesman Keith Nowak said.

In a statement in Taipei yesterday, HTC added that it had not had the opportunity to investigate the suit.

"Until we have had this opportunity, we are unable to comment on the validity of the claims being made against HTC."

In a separate statement to the Taiwan stock exchange, HTC said it will not see any impact on its financial outlook for the first quarter from the lawsuit.

"The news is having some impact on HTC's shares but lawsuits are quite common among tech firms and I would say it is just a threat from Apple this time," said John Chiu, a fund manager at Taiwan's Fuh Hwa Securities Investment Trust. "However, HTC is not a good buy in the longer term since its margins will be coming under pressure when competition intensifies."

Apple's move comes amid fierce competition in the smartphone market, as new players angle for a piece of the fast-growing segment.

Mark Simpson, a patent attorney with law firm Saul Ewing in Philadelphia, said HTC made for an easier target than Google.

"It's probably simpler for them to go after the company making the infringing goods, which is HTC. It's easier to prove at this point," Simpson said.

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