Apple (AAPL) Sues HTC As Handset Wars Intensify

Kodak (EK) sued Apple, RIMM, and Motorola (MOT) for patent infringements. Nokia sued Apple (AAPL). Nokia claims to have patents that the Apple uses in the iPhone. Now Apple (AAPL) has filed a patent suit against Chinese manufacturer HTC which makes its own Google (GOOG) Android-based handset and builds phone for a number of other companies.

In an announcement about the legal action, Apple CEO Steve Jobs said “We can sit by and watch competitors steal our patented inventions, or we can do something about it. We’ve decided to do something about it.”

The suit says HTC infringed on 20 Apple patents related to the iPhone’s user interface, underlying architecture and hardware. The lawsuit was filed concurrently with the U.S. International Trade Commission and in U.S. District Court in Delaware.

It is too early to say how these legal actions will work out. Several patent suits between cellphone chip companies Qualcomm (QCOM) and Broadcom (BRCM) which were filed in federal district court and with the ITC took years, and probably tens of millions of dollars in legal fees, to settle. The Apple suit is more complicated because nearly half a dozen handset companies or companies which own intellectual property for handsets are in legal battles. Apple may even be suing HTC over patents that a court may eventually rule that  Jobs & Co. do not own

Over one billion handsets are sold worldwide each year. While the business of selling inexpensive phones is not terribly profitable, the emerging smartphone market which is now dominated by Apple, RIM, and handsets that run Android is. Each firm involved in these actions knows that hundreds of millions of dollars at stake, and the winners will end up “owning” the high-end of the handset market.

Douglas A. McIntyre