Taiwan handset maker HTC may not be able to recover if Apple prevails in its patent infringement suit against the Android handsets manufacturer.

The win that went to Apple is the latest round of its patent infringement battle with HTC as a judge at the International Trade Commission ruled that HTC has infringed two of Apple?s patents, according to reports. If the ruling is approved, HTC might have to pay a licensing fee to Apple or be banned from shipping into the United States.

?The money, depending on what they can get for it, could be very damaging and undermine any profits HTC is making,? said Michael Morgan, senior analyst for mobile devices at ABI Research, New York

?If they can?t ship to the U.S., that is upwards of 50 percent of their business they can?t ship,? he said. ?That could put HTC under.?

A workaround
The ITC judged ruled that HTC infringed two of the four patents that Apple alleges were infringed. The patents relate to data-detection technology used in smartphones for e-mail and text messages as well as data transmission.

The ruling is preliminary and is subject to approval by the entire six-member commission.

The final verdict is expected in December.

The implications for HTC could be significant if the ruling is approved and it has to either pay a licensing fee to Apple or stop shipping products to the U.S.

However, can HTC  find a way to work around the technology in question?

?HTC can look for another way to do the same feature but sometimes the patents are so broad, it is not feasible to do a work around,? Mr. Morgan said.

If a workaround is not found, HTC could try to develop handsets using alternative technology.

But it would have to make the handsets equally compelling for consumers.

The patents in question cover basic smartphone features. One piece of technology involved in the patent lawsuit enables a mobile device user to open a Web page, click a phone number on the page and automatically dial that number.

It is possible that Apple is not suing HTC for the money but rather to slow down the competition.

?Apple is saying, let?s stop the competition from being on our turf,? Mr. Morgan said. ?They don?t need the money.?

?Apple wants to vigorously defend the stuff that they feel that they created and is saying to others, you do your own legwork,? he said.

Android attack
If Apple wins , it could decide to go after other Android handset manufacturers.

Apple could go to the other handset manufacturers, for example, and ask for a licensing fee for this technology, using the win against HTC as leverage.

?These patents could be used in essentially every Android device,? Mr. Morgan said.

?If Apple wins here, it greases the wheels against other handset manufacturers.

The case is another example of the growing importance of patents in the mobile space.

Apple first sued last year and HTC countersued Apple in the ITC. That hearing is scheduled for September.

All or some of the patents involved have also been used by Apple in suits brought against Motorola and Nokia.

Apple is also embroiled in a legal suit with Samsung.

Android is facing legal issues on other fronts as well, with Oracle filing a suit against Google and Microsoft suing Motorola.

?This is showing that you need to have a serious war chest of patents if you want to continue to play in the Android ecosystem,? Mr. Morgan said.

For example, HTC recently purchased S3 Graphics to beef up its own patent portfolio.

The effect for Android OEMs is that what is supposed to be a free operating system increasingly requires licensing fees and a legal strategy to protect. This, in effect, creates a legal tax for Android. 

With Google typically not stepping in to help OEMs in these legal cases, they may need to take matters into their own hands.

?Maybe the solution to keep people out of the Android bubble is that we?ll have a patent pool,? Mr. Morgan said. ?Everyone buys into it ? you  don?t have your own individual differentiator but you are better protected legally.?

Final Take
Chantal Tode is Assoc. Editor at Mobile Marketer