HTC Files Suit Against Apple (AAPL, MMI, GOOG, HPQ, SSNLF)

In the seemingly never-ending round of intellectual property lawsuits over smartphone technology, Taiwan’s HTC Corp. has fired the latest shot. The smartphone maker has filed a complaint with the International Trade Commission alleging that Apple Inc. (NASDAQ: AAPL) is infringing HTC’s patents related to wireless technology. Apple earlier filed suits against HTC for infringing the Cupertino company’s patents.

The patent wars in the smartphone market are expected to get even hotter now that Motorola Mobility Holdings Inc. (NYSE: MMI) has agreed to be acquired by Google Inc. (NASDAQ: GOOG). Motorola holds some 17,000 patents, and many observers believe that Google’s acquisition of Motorola is primarily a move to gain ownership of Moto’s patent portfolio.

There’s a lot at stake here. The smartphone market is expected to grow by 62% this year, with total handset sales topping 475 million units. Tablet sales, such as Apple’s iPads, TouchPad from Hewlett-Packard Co. (NYSE: HPQ), and the Galaxy from Samsung Electronics (OTC: SSNLF), could explode by 300% to 69.5 million units.

A possible scenario, once the dust settles, is for the different vendors to cross-license patents amongst themselves. Whether or not the smartphone makers will kiss and make up or continue the circular firing squad routine remains to be seen.

One unknown is how Asian smartphone makers will react. This is new territory for companies like HTC and they may prefer to fight it out.

More lawsuits are likely in the short term, and it wouldn’t be too surprising to see Apple or another company (perhaps Microsoft Corp. (NASDAQ: MSFT) or its partner Nokia Corp. (NYSE: NOK)) take aim at Google, most likely by trying to stop the Motorola acquisition.

An end to the patent fights preferably through cross-licensing agreements would be best for consumers. But what’s best for consumers is not at the top of any smartphone maker’s mind right now.

Paul Ausick