On December 19, 2011, the ITC handed down its lenient final ruling on Apple's first complaint against HTC, holding the Taiwanese company's Android devices to infringe only one of Apple's asserted patents and providing for generous transitional periods during which HTC can still ship infringing devices. Apple wouldn't be Apple if it contented itself with an outcome that represents significant progress but is clearly suboptimal, especially since it falls short of the initial determination made by an Administrative Law Judge.
The ITC is a quasi-judicial government agency. Its decisions can be appealed to the Court of Appeals for the Federal Circuit (CAFC), and that's what Apple has done, as reflected by the following header of a court order:
In fact, Apple lodged this appeal back on December 29, 2011, but it's not always easy to find out about CAFC proceedings. I just ran a few searches on Google News and couldn't find any previous report on this appeal. Today I became aware of it because Apple mentioned this appeal yesterday in a filing with the United States District Court for the Northern District of Illinois. In that court, Apple is asserting the '263 "realtime API" patent (for more information on its significance, let me refer you to the infringement claim chart and a blog post on Apple's claim that Android chief Andy Rubin got the inspiration for Android while working at Apple, where his then-bosses made this particular invention) against Motorola. Apple told the Chicago-based court that an Administrative Law Judge agreed with Apple's construction of the term "realtime application programming interface" (and, as a result, held HTC to infringe it) but the Commission, the six-member decision-making body at the top of the ITC, "reversed the ALJ's construction". Motorola argued that the Commission decision should be taken into account by the district court, but Apple states that "[t]he Commission's decision is on appeal to the Federal Circuit and has no preclusive effect in this [District] Court".
Therefore, it's clear that Apple's appeal of the ITC ruling at least aims to broaden the scope of the import ban by including the '263 patent. If Apple succeeded, this would greatly increase the business impact of the import ban.
Apple's appellate brief isn't publicly available yet. Therefore, it's not known whether Apple appeals any other parts of the ITC ruling beyond the finding of no violation with respect to the '263 "realtime API" patent. It is, howver, rather likely that Apple's appeal also relates to one or more of the following issues:
Apple's contingent petition for review asked the ITC, for the event that it decided (as it did) to review the initial determination, to find HTC in infringement of two other patents:
U.S. Patent No. 5,481,721 on a "method for providing automatic and dynamic translation of object oriented programming language-based message passing into operation system message passing using proxy objects"
U.S. Patent No. 6,275,983 on an "object-oriented operating system"
The Commission looked into issues concerning those two patents, but deemed the '721 patent invalid and not infringed, and concluded that the '983 patent was neither infringed nor practiced by Apple according to the ITC's claim construction (and under Apple's own claim construction, the Commission said the patent would still not be infringed, but it would be invalid).
Apple may hope that the CAFC will let it prevail on one or both of those patents as well.
Every import ban proposed by the ITC is subject to a Presidential Review, which takes 60 days, but the ITC gave HTC two extra months to modify its products so as to steer clear of infringement. This means that the formal ban only takes effect in April 2012, more than two years after Apple's original complaint.
As I noted, the fact that HTC immediately announced a workaround (which simply came down to removing the feature) and downplayed the importance of the related feature suggests that the ITC ruling was exceedingly lenient. Apple may be appealing that question as well. Even though this appeal won't be resolved in time to shorten that transitional period, Apple might have a strategic interest in this issue with a view to its other ITC complaints that are still being investigated or that it may bring in the future.
The ITC furthermore decided not to issue a cease-and-desist order. The purpose of a cease-and-desist is to stop companies from selling infringing devices that they imported before the ban took effect. Without a cease-and-desist, companies can import huge quantities of products shortly before the import ban and thereby delay the business impact of an ITC ruling. This, again, will be too late for HTC's devices, but could be a strategic issue with a view to Apple's continuing enforcement of intellectual property rights.
Whatever the scope of Apple's appeal against the ITC may be, I believe Apple has realistic chances of winning a better outcome, but this will take time before the CAFC hands down its decision on this appeal.
Some of the other recent and upcoming smartphone-related ITC decisions may also be appealed. The drop-out rate of patents asserted in ITC complaints is astoundingly high, and I wouldn't be surprised if the Federal Circuit found that the ITC erred in favor of respondents in a few cases.
Apple is no stranger to the Federal Circuit. Also in December, Apple filed an appeal against the denial of a preliminary injunction against Samsung by the United States District Court for the Northern District of California. Appeals against decisions on preliminary injunction motions are usually adjudicated more swiftly than those against ITC rulings.
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