While testifying in the Samsung vs Apple case on Tuesday, it was revealed that Google has agreed to help Samsung defend itself against Apple in its current patent-infringement case. According to a report from Re/Code, citing deposition testimony from Google lawyer James Maccoun, Google has also agreed to partially or fully indemnify Samsung for any loses it may suffer on its claims.
Google’s executive chairman Eric Schmidt has gone on the offensive and bashed Apple over patent infringement claims the company had filed against high-profile Android backers such HTC and Samsung. In what could be viewed as an effort to sway the public perception, he launched a nasty attack speaking at Google’s Mobile Revolution conference in Tokyo. To Schmidt, Apple’s taking rivals to court sends a strong signal, that of the lack of innovation and jealousy:
The big news in the past year has been the explosion of Google Android handsets and this means our competitors are responding. Because they are not responding with innovation, they’re responding with lawsuits. We have not done anything wrong and these lawsuits are just inspired by our success.
Schmidt re-iterated sales of 135 million Android phones since 2008 and highlighted more than 550,000 daily activations that exclude tablets and non-smartphone devices, which is up from 400,000 a day in May. He said Google will support HTC’s legal battle against Apple’s copyright accusations, but wouldn’t elaborate.
Whether or not Apple’s legal pressure stems from jealousy is up for debate, of course. Cynics might argue Schmidt’s comment draws from nervousness on Google’s part because Android backers are increasingly discovering hidden costs as Microsoft and Apple emerge as holders of patents crucial to Google’s mobile operating system. Apple’s victory over HTC may set what RBC Capital Markets analyst Mike Abramsky painted as a high royalty precedent for Android devices that could further shrink the already slim margins on Android phones.
As if that wasn’t enough, Microsoft is already taking money from five Android vendors for patent protection, including HTC which is said to pay five bucks each time it ships an Android handset and General Dynamics Itronix. Microsoft is also understood to have targeted Samsung, seeking royalties in excess of hundreds of millions of dollars annually. The Cupertino, California-headquartered gadget giant quoted Steve Jobs in a statement announcing the HTC lawsuit March last year:
Then Google CEO Eric Schmidt shares the stage with Steve Jobs at the January 2007 iPhone unveiling. The times of happiness would abruptly come to an end amid Android whispers, culminating with Apple announcing Schmidt’s resignation from its board August 3, 2009.
Shares of the Taiwanese Android phone maker HTC fell 6.5 percent this morning following the ruling by the International Trade Commission (ITC) that the company violated two patents held by Apple. The company’s shares have been pretty much free-falling throughout last week. The agency’s commissioners still have to support the ruling, but investors are already panicking over fears that the ruling will favor the California-based gadget maker. This, in turn, would open doors to ITC’s ban on imports of HTC’s phones into the United States. In response to the crisis, HTC announced a share buy back program worth up to $760 million in an attempt to stabilize its share price and restore investor confidence, reportsFinancial Times:
The attempt to prop up HTC’s share price appeared to have little effect as the stock fell below HTC’s minimum purchase price of T$900 to close down 3.9 per cent at T$871. The sell-off highlights investor fears that the legal battle could have wider implications for the competitive balance between Apple and Google Android-based phonemakers like HTC, Samsung and Motorola.
HTC is thought to have recently acquired S3 Graphics for $300 million in a bid to secure a stronger ground in its legal dealings with Apple, which filed its patent infringement complaint against the Taiwanese company back in March 2010. Apple accused HTC of violating up to twenty patents related to the iPhone’s hardware, software and its user interface. ITC recently ruled in favor of S3 Graphics, deciding the iPhone maker infringed on two patents held by S3 Graphics. They also acquired a portfolio of 82 patents from US-based ADC Communications for $75 million and signed an Android protection pact with Microsoft. HTC is expected to use all of this in the hope of relieving some of the pressure from Apple’s legal sharks. If ITC decides to ban import of HTC phones into the US and the company does not reach a timely settlement with Apple, its stock price could free-fall further.
