Patent firm sues German retailers over HTC phones

FRANKFURT Thu Dec 22, 2011 2:48pm EST

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FRANKFURT (Reuters) - Patent firm IPCom has sued German retailers for patent infringement for continuing to sell phones made by HTC, the No. 4 smartphone maker globally.

A court in Mannheim, Germany, ruled in February 2009 against HTC in a patent fight with IPCom, allowing an injunction against sales of HTC phones using UMTS technology and setting a penalty of up to 250,000 euros ($326,000) each time the injunction was violated.

All HTC smartphones use UMTS technology.

After HTC dropped an appeal of the ruling, a court in Karlsruhe, Germany, in late November said the injunction against HTC smartphone sales in Germany could be enforced.

IPCom said in a statement on Thursday that it sent 100 retailers cease and desist requests on December 6, asking them to stop selling HTC's 3G handsets by December 20.

"Since this deadline has passed without any of the retailers complying, IPCom has sued them for infringement of patent #100A themselves," IPCom said, adding so far it has sued around 30 retailers.

The legal battle could cost HTC millions of euros and hurt its relations with retailers in one of its key markets.

The company sells around 2 million smartphones a year in Germany, some 4 percent to 5 percent of the group's total, according to research firm IDC.

"This poses another challenge for HTC in managing confidence of key distribution partners -- a further reminder of the destabilization effect patent claims threaten to exert on the industry in 2012," said Geoff Blaber, analyst at research firm CCS Insight.

HTC said the #100a patent has never been found to have been infringed by its phones in any court of law and that it was confident the patent would be revoked at a hearing of European Patent Office on April 24, 2012.

"HTC once again confirms its position that its phones do not make use of the teaching of that patent," the company said. "HTC is committed to protecting its partners' and customers' interests."

Earlier this week HTC lost a patent case against Apple Inc in the United States, the market that generates half of its revenues. HTC said that it could soon replace phones with the disputed technology with new models.

IPCom acquired Bosch's mobile telephony patent portfolio, created between the mid-1980s and 2000, which includes about 160 patent families worldwide, including some of the key patents in the wireless industry, such as patent 100, which standardizes a cellphone's first connection to a network.

Several of the top phone makers have signed a licensing deal with IPCom, but HTC and Nokia have challenged IPCom's technology patents in courts across Europe.

IPCom said by continuing to use its patents without paying a fair compensation IPCom could in the future legally refuse HTC a license for its standard-essential patents.

($1 = 0.7664 euros)

(Reporting by Christoph Steitz and Tarmo Virki; Editing by David Cowell and Steve Orlofsky)

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