Giving evidence in the patent dispute
with Nokia, patent manager at HTC Brad Lin told the high court that the company
does not know what features its key chips will have. Photograph: AP
Nokia has won a sales injunction which could see HTC blocked
from selling its phones in the UK - including the HTC One - unless it can lodge
a successful appeal by 4pm on Friday 6 December.
Giving evidence in the patent dispute with Nokia, patent manager
at HTC Brad Lin told the high court that the company does not know what
features its key chips will have.
He told the court that "the features of the chips selected
by HTC [for its new phone] are unknown to HTC" and that he therefore did
not know whether they infringe a specific patent owned by Nokia.
'Simply
incredible'
But His Honour Justice Arnold called Lin's statement
"simply incredible" in the context of the dispute, where Nokia has
successfully asserted that the Broadcom and Qualcomm chips used in the HTC One
infringed one of its patents.
"I shall assume that what Mr Lin
means is that HTC does not know if the chips have the features of claim 1 of
the [Nokia] Patent," HHJ Arnold said in his
judgment. "The significance of that assertion, even assuming it
is correct, depends on what efforts HTC has made to find this out, which
neither Mr Lin nor any other witness reveals."
The successor to the HTC One, the flagship phone from the
Taiwanese phone maker, could be released as soon as February next year, the
court heard, though the company has not yet announced a date.
HTC unveiled the
One in February this year, although production problems meant that
it did not go on widespread sale until late April.
According to evidence presented to the court, the UK smartphone
market has grown from $7bn (£4.4bn) in 2012 to $9bn this year, and is dominated
by Apple and Samsung, which have 39% and 33% of the market respectively.
Overall, Android phones make up 48% of sales, the court heard.
Direct
competition
Nokia has about 6% of the market and HTC just 3%, the court was
told - putting their respective revenues at $540m and $270m. HTC contended that
because the phones run different mobile operating systems that the two are not
in "direct competition" - which Nokia disputed. It claimed that it
had lost sales of its Lumia phones since the launch of HTC's One.
The court also heard that the UK is HTC's largest market in
Europe, and that the HTC One, One Mini and One Max account for 70% of its sales
in the UK. From January to September HTC sold 715,000 smartphones in the UK,
with revenues of £221m, an average selling price of £309.
The patent in question covers "a modular
structure for a transmitter and a mobile station" filed in
October 1999. Nokia has previously successfully sued Apple for infringing the
same patent, a dispute that was settled in April 2011. BlackBerry also settled
with Nokia over the same patent.
Sales
bans
Nokia is asserting the patent against HTC in a number of
countries, and the consequences of further losses could be serious if they are
also followed by sales bans.
LG - through Google's range of Nexus phones - Samsung and Sony
are also in litigation with Nokia over alleged infringement of its patent.
Nokia said in a statement that it was "pleased that the UK
high court has imposed an injunction on certain HTC products found in October
to infringe a Nokia patent… Pending the appeal, HTC has undertaken not to ship
any more of the infringing products into the UK, except the HTC One which it
may continue to sell until the conclusion of any appeal. If HTC does not
succeed on appeal, the injunction will take effect on all infringing
products."
HTC has seen its revenues dwindle in
the global smartphone business as it struggles against Samsung and smaller
Chinese rivals, as well as Apple and Nokia. Its monthly revenues for November, reported on
Tuesday, were down by 27% year-on-year to $522m (£328m).
SOURCE: theGuardian
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