The International Trade Commission today granted Apple's motion to dismiss five out of eight patents from HTC's case against the Cupertino company. HTC acquired rights to the five patents from Google last year, in a clear attempt to arm Android OEMs against Apple without getting directly involved. However, it looks like that strategy has backfired, at least in this particular case. While the ITC decision is not currently available to the public, the summary of the ruling does state that the patents were dismissed "due to lack of standing." Based on that, it seems whatever ownership or licensing rights HTC acquired from Google, it fell short of what is required under the law to permit enforcement of a patent. Ultimately, it seems Google failed to give HTC the ammunition it needed to fight this battle.
It's all about the bundle of sticks HTC received from Google
In the US you must have a minimum level of ownership-type rights in a patent in order to assert that patent against others — it's often referred to as the requisite "bundle of sticks." The safest way to guarantee you have a sufficient bundle of sticks is to buy a patent outright, with the previous owner retaining no rights or ownership in the patent. You can get away with less, but as soon as the original patent owner starts holding things back — like enforcement approval or it's own enforcement rights — things can become problematic. In this case, it just doesn't appear that Google and HTC took all the necessary steps to ensure a proper transfer. While we don't know exactly where the deficiencies lie, we do know that they were serious enough for the ITC judge to determine HTC lacked standing to continue asserting those patents in the case.
On one hand, this is a big deal because it reduces the number of patents HTC is asserting in the case to just three. On the other hand, it's a situation that ultimately could be fixed. Namely, Google and HTC could ink a better patent transfer agreement. They obviously know where things went wrong according to the judge. However, it may be too late to save the patents for this particular case, and it's always possible Google doesn't want to completely hand over all of the rights — at least not on a permanent basis. In any case, HTC can't be very happy right now. At a minimum, this introduces an unwanted delay at a time when Apple is beginning to have some success at the ITC against HTC's devices. We'll keep an eye on future developments, which we assume will include either a request for the judge to reconsider his decision, or an appeal to the full ITC panel.