Frequent defendant HTC may be looking to China for its out-licensing opportunity 07 Dec 17
When it comes to patent strategy, Taiwan device maker HTC has stood out in a couple of respects. First, its role as a foundational Android partner has seen it work on numerous patent initiatives with Google around patent protection for its mobile operating system. Second, it defends a lot of infringement cases. But recent developments in China suggest it may be exploring ways to leverage its patent portfolio there in a way that generates revenues.
A report in Chinese media states that an HTC-owned invention patent with a relatively recent grant date recently emerged from an invalidation proceeding before China’s SIPO Patent Re-examination Board (PRB) largely unscathed. The challenger was Chinese smartphone maker Gionee – a relatively small player in the domestic market that also sells devices in India and Southeast Asia. The patent, a grant covering “Mobile device and antenna structure” issued by SIPO in December 2016, also has US family members.
According to the report, HTC was able to amend some of the claims of the challenged right between the time when the re-examination request was filed in April 2017 and the hearing held on 25th August 25. On the basis of those amendments, the PRB preserved the validity of HTC’s right. Though no Chinese infringement litigation is known, the author surmises that there could be one in the pre-hearing phase. At the least, it seems likely that the Taiwan company is looking to license this patent, and maybe others, in a major neighbouring market.
In the US context, HTC has long been a favoured target of NPEs and other entities. Even as its market share in terms of smartphone sales has steadily declined in recent years, the company has remained a lightning rod for assertions. According to Lex Machina, it is embroiled in about 40 active patent suits, and is the defendant in all save one (an action for declaratory judgment against an NPE). It has also been a target closer to home: Texas-based Longhorn IP filed its first Chinese patent suit against HTC – again, despite the fact that the company is not a huge smartphone market player there.
Out of the necessity, HTC appears to have developed an effective defensive strategy. You would be hard-pressed to find a more effective high-volume filer of IPRs. Its 91 PTAB petitions have so far been instituted at a 71% clip – better than any of the big filers at the time of this IAM analysis. Its ability to get final decisions rendering all claims unpatentable is close to Apple’s.
But while HTC’s US patent portfolio is relatively modest at around 2,000 patents, it may well have some scope to enforce its rights against newer market entrants from China. The fact that the challenge came from Gionee, which owns just a handful of US rights and around 1,400 published Chinese applications, suggests that HTC is looking beyond cross-licences with big global players and toward technology implementers which it might have an advantage against.
Many people thought Google might acquire HTC or its smartphone unit and IP earlier this year, but in the end HTC parted only with a team of around 2,000 smartphone engineers. Chairwoman Cher Wang said the deal, which also included a renewal of an HTC-Google patent cross-licence, validated the company’s brand, IP portfolio and innovation prowess. Now that the company is doing less smartphone development in-house but retains ownership of related IP assets, perhaps we will see more impetus to use those rights to generate value, especially in the huge market at its doorstep.
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