Microsoft Could Be Affected by Apple, HTC Lawsuit

Apple's patent-infringement lawsuit against HTC, and possibly other handset manufacturers, has the potential to affect Microsoft as it ramps up to the release of Windows Phone 7 Series devices later in 2010.

Apple filed a lawsuit against HTC on March 2, alleging that the manufacturer violated some 20 patents related to the iPhone’s interface, architecture and hardware. "We think competition is healthy, but competitors should create their own original technology, not steal ours," Apple CEO Steve Jobs wrote in a statement posted on Apple’s Website on that date. The lawsuit itself was filed with both the U.S. District Court in Delaware and the U.S. International Trade Commission.

HTC had unveiled several smartphones running Google Android during the Mobile World Congress in January, including the HTC Desire and the HTC Legend. But the manufacturer is also a recognized partner with Microsoft on the software giant’s Windows Phone 7 Series, its upcoming smartphone operating system, which raises a question about potential effects if Apple decides to play its hand in court and wins the lawsuit.

Windows Phone 7 Series integrates content from both applications and Web services into a series of what it terms "hubs," which include "People," "Pictures," "Office," "Music & Video" and "Games." But more relevant within the context of Apple’s lawsuit is how the new smartphone operating system leverages touch screens; one of the reported hardware designs for Windows Phone 7 Series involves a full touch screen and no physical keyboard, making it heavily reminiscent of the HTC Droid Eris and Nexus One that are the current focus of Apple’s legal muscle.

"If Apple is prepared to claim a certain level of intellectual property, it could go after Microsoft on the same grounds as it went after HTC," Roger Kay, an analyst with Endpoint Technologies Associates, wrote in a March 4 e-mail to eWEEK. "Everyone has been treating multitouch as open territory, and it may not be."

However, Kay added, the current conflict is not the same as the intellectual-property battle fought between Apple and Microsoft more than 15 years ago. "In that one, prior art was found at Xerox Park, and Apple’s patents were invalidated," he said. "But this time, even with people like Jeff Han, who has done great pioneering work in multitouch in academia (and his own commercial entity), Apple may still own certain key pieces. That could put a damper on potential licensors of the Windows Phone 7 interface."

Apple’s lawsuit against HTC is widely seen as a flanking maneuver against Google. While the two companies at one point operated on what outsiders viewed as largely friendly terms, the entrance of Google into the smartphone space, with Google Android, put it into Apple’s competitive sights. Since then, the two companies have engaged in an escalating back-and-forth over issues such as Google’s mobile applications being allowed onto the iPhone, but certain factors may preclude Apple from being able to directly launch against Google over mobile software.

"I would have to agree it’s ultimately an attack on Google," Gartner analyst Ken Dulaney told eWEEK’s Clint Boulton on March 3. "But suing HTC may be a result of the implementation issues. One reason would be that Google doesn’t really 'own' Android. It’s a nebulous environment under the control of the Open Handset Alliance who manages the open-source pool. So until it’s put on a phone, there is no target to attack. Suing Google wouldn’t make sense, since they really don’t control it. It’s the OEMs who choose the particulars." 

Android has been gaining steadily in market share, with data released by analytics firm Quantcast on March 1 suggesting that the operating system had experienced a monthly gain of 8.3 percent in February, occupying 15.2 percent of the mobile Web consumption market in North America. By contrast, in that same analysis, iPhone stood at 63.7 prcent while Research In Motion’s BlackBerry operating system held 9.2 percent.

Apple is also engaged against Nokia in a legal back-and-forth over supposed violation of intellectual property, a battle that extends back to October 2009. Nokia had originally been seeking royalties on patents from Apple in May 2009, and following Apple’s refusal to negotiate, the two companies descended into lawsuit territory.

While Apple’s attention currently seems focused on Google, the potential does exist for it to spill over to affect Microsoft in some aspects. For its part, Microsoft is hoping that Windows Phone 7 Series devices prove a hit among both consumers and businesses, in order to reverse the company’s steadily declining market share in the mobile arena.