The United States International Trade Commission ("ITC") decided on Friday that HTC and others had not violated the digital camera patents of FlashPoint to produce their smartphones.

FlashPoint, a spinoff company of Apple, lodged a suit in 2012, accusing HTC, Huawei and ZTE of infringing its four patents for smartphone cameras. One of the patents was dropped during the handling of the case.

On 30 September 2013, a judge focusing on administrative laws ruled that two HTC smartphones, HTC Vivid and HTC Droid Incredible 4G LTE, infringed one of FlashPoint’s patents, while Huawei and ZTE were cleared.

The ITC, however, issued a final decision on Friday after reviewing the judge’s ruling, stating that none of the accused companies had infringed patents of the plaintiff, and therefore decided to terminate the investigation. If either of the two companies were found guilty of violating the patents, its smartphones could have been blocked from the United States market.

The ITC is popular for hearing patent lawsuits because it can more easily ban infringing products from the United States than district courts are able to. Only when an accused company indeed infringes a patent and the patent owner has used the patent in the United States will the ITC rule that a patent has been infringed.

(Source: www.tech.qq.com)

Comments

Jianwei Han: FlashPoint was originally a company focusing on the research and development of digital camera technologies. In 2007, it suspended the research and development activities and converted itself into a patent operating company for profit-making. Before the suit against ZTE, Huawei and HTC, it had also accused Nokia, RIM and LG of infringing its patents. But both Nokia and LG reached settlement with FlashPoint before the announcement of the ruling. In addition to them, Apple, HP, Motorola and Nikon had purchased patent licensing from FlashPoint. The victory of ZTE in this case, its third victory in the Section 337 investigations in less than three months, reflects that Chinese companies have been strong enough to protect themselves. In addition, Chinese companies should be wary of such patent operating company. It is advised to conduct relevant research before the export of products in order to become aware of the possible risks.

Lichao Liang: The frequent suits against ZTE, Huawei and HTC have a certain connection with their positions in the industry. In 2013, Huawei’s global smartphone shipments reached nearly 50 million, ranking third worldwide, ZTE’s shipments were about 40 million, ranking sixth in the world, and HTC’s shipments were also considerable despite ranking outside the top ten. In such case, if any of them is found to have violated a patent, it would be possibly asked to pay a considerable amount of damages. For growing enterprises which are currently not mired by patent allegations, it is not because they do not infringe patents of others, but because they are of a smaller size. Considering that the amount of damages would be limited, patent holders are less motivated to devote more resources in order to sue them. Once these growing enterprises develop to a certain size, patent-related allegations against them increase. Therefore, preventative measures must be taken in advance, with a reasonable IPR strategy made available so as to resolve risks as early as possible.

Mike J. Chen: The United States’ Section 337 investigations are not something new to Chinese entities. In recent years, Chinese companies, especially companies like Huawei and ZTE, which were frequently named as defendants in the investigation, have accounted for around 30% of the Section 337 investigation cases. The Section 337 investigations have been a perfect "weapon" for foreign enterprises to stop Chinese counterparts from entering into the United States given its low thresholds, simple procedures, great effectiveness of the elimination order, plus the previously passive response of Chinese entities and other factors.

However, there were also a few cases in which companies like ZTE and Huawei cleared in the Section 337 investigations. It is then concluded that, in response to the 337 investigations, Chinese companies should have an active attitude with good knowledge of the procedures. The strategies may include patent infringement defence and patent invalidation defence. In fact, it is not as difficult as expected to tackle the 337 investigations. Finally, it is very important for Chinese companies to conduct patent research for the prevention of patent infringement before exporting their products to the United States.

Joe Jiang: Recently, reports about ZTE’s victory in the Section 337 investigations have spread. As a typical representative of Chinese firms that have successfully "gone out", ZTE’s victories have conferred confidence in other Chinese firms that are ready to enter into the United States or have been in the United States. However, even with confidence and finally being cleared in the investigation, Chinese companies, especially those small and medium ones, would be greatly undermined, as they need to devote a lot of time and money to dealing with the ITC when they are faced by a real investigation. Fortunately, more and more Chinese companies have realized this. They began to "go out" by forming an industry alliance. In this way, they would be able to fight as a team instead of a single company under the growing Section 337 investigations. This would undoubtedly increase the cost of the accusing party and reduce the risk for each single company.