In one of many Apple patent fights concerning smartphones, it went after Taiwanese smartphone maker HTC in both the courts and using the infamous ITC loophole that gives the company two separate cracks and blocking competition using the same patents. The ITC ruled in Apple's favor late last year, issuing its customary injunction (the ITC can only issue injunctions blocking import, rather than any monetary award). HTC was given time to create a fix, but the injunction has apparently gone into effect, and it means that the newest HTC phones -- eagerly awaited by some -- are being held at the border by customs to make sure that allowing them into the country won't violate the ITC injunction. It's pretty sad that Apple doesn't appear to think that it can actually compete on the merits in the marketplace, but rather has to resort to this sort of protectionism. Similar to Apple's complaints against Samsung, I have to admit that all this has really done is increase my interest in both the HTC One X and the HTC Evo LTE. If a smartphone is so good that even Apple is scared to compete against it, well, that seems like a phone that might be worth having...

Back when Steve Jobs launched the iPhone, one of the points he made clear in his presentation was how Apple had applied for over 200 patents on the device. And, yet, despite all of that, Apple has been sued over and over and over and over and over and over and over and over and over and over again. And, of course, only recently did Apple file a patent lawsuit in the other direction.

Given all of this, it was really only a matter of time until the patent litigation began flying over the iPad. Slashdot points us to the news that Elan Microelectronics is seeking to ban the import of iPads into the US via the ever-popular ITC loophole. Amusingly, the whole point of the ITC injunction process is supposed to be to protect American companies against foreign companies importing in patented technology. Yet, in this case, it's a Taiwanese company suing an American company. This seems like a pure money grab, like many of the iPhone patent lawsuits, and once again demonstrates the problems of the patent thicket around mobile devices these days.

The patent in question 5,825,352 is for multi-touch screen inputs, and was apparently originally held by Logitech. Of course, in many ways this really highlights the points we've talked about. What Apple did with the iPhone was quite innovative, but wasn't really that inventive. It took concepts that had been out for a while, including multi-touch, and did something really cool with it: putting it into a compact, mobile device that people really wanted. The other players in the space weren't working on anything like that at all, and now patent battles are simply a waste of time holding back more innovation, rather than letting companies actually continue to come up with the next great thing.

We actually had some high hopes for Kodak not to go down this road, as it had shown some desire to actually focus on innovation, rather than going the litigation route, but apparently that wasn't working. As a bunch of you have sent in, Kodak has decided to go after both Apple and RIM for patent infringement -- and like so many these days, it's going for a double dip by filing a lawsuit in the courts and separately using the ITC loophole as well. How often do we see this? A company with a legacy business that is under threat of innovation... and it suddenly starts focusing on patent lawsuits rather than concentrating on actually adapting. Sure, it can try to do both at once, but it's rare to see that happen. Once the company breaks out the patent lawsuits, it's almost screaming out that its innovation efforts aren't very successful.

We've seen how Nokia's troubles in keeping up in the smartphone market have resulted in suddenly filing a whole bunch of patent lawsuits, including the big one against Apple over the iPhone. Of course, as usually happens in these types of situations, Apple fired back with a patent infringement lawsuit of its own against Nokia. Welcome to patent nuclear war.

And, of course, if you thought the battles would end there, you haven't been paying attention to how patent battles work these days. For years now, we've been pointing out that many patent holders actually get two cracks at companies over the same exact patents. They sue in the courts, and they use the ITC loophole to get a second crack, which could have even worse consequences. You see, the International Trade Commission is supposed to watch out for unfair trade practices. So many patent holders go to the ITC and claim that companies that infringe on patents are using unfair trade practices and should be barred from importing those goods into the US. Of course, the ITC could rely on the courts to determine if the products are actually infringing, but it does not. It decides for itself. And while the ITC cannot issue fines, it can issue an injunction barring the import of these products. With so many high tech products being manufactured overseas, this creates an effective injunction against selling many high tech products in the US... even as the Supreme Court has made clear that injunctions don't always make sense. But, the ITC is not bound by the Supreme Court on this and can do what it wants. A recent study has shown that this ITC loophole is frequently abused.

So, it's not at all surprising that (yes, indeed), Nokia has jumped in with both feet and has filed a complaint with the ITC as well over the Apple iPhone and its alleged infringement on Nokia patents. So now we have two totally seprate processes, either of which could conceivably bar Apple from selling iPhones in the US, just because Nokia's been too slow in coming up with its own iPhone competitor. That's not encouraging innovation at all. It's proactively trying to use the US government to slow it down.

We've been discussing the ITC loophole, that allows patent holders to get two cracks at charging a company with infringement over the same patent (using different rules) for a while now. Patent holders can sue in court and they can complain to the International Trade Commission, which has the power to issue an injunction, barring the import of any "infringing" products. Even worse, the ITC doesn't necessarily need to follow the rules set forth by the Supreme Court over what is and what is not infringing. It gets to decide on its own. This has resulted in widespread abuse of the process, with many companies getting to use both processes to beat other companies into submission. Perhaps the one saving grace of the ITC loophole was that it was really only used by patent holders who actually had products on the market -- since there's a requirement that the supposedly infringing products represent a threat to a "domestic industry." That would (in theory) make it difficult for a company that just hoards patents to make a successful claim that a domestic industry is harmed.

But, of course, you should never underestimate the lawyers who deal with such non-practicing entities. Joe Mullin has the latest on one such attempt by an patent hoarding firm, Saxon, who is using the ITC loophole to go after a bunch of companies, including Nokia, HTC, RIM, Palm and Panasonic. Not surprisingly, on the very same day, it filed a patent infringement lawsuit (in East Texas, of course) against the same companies using the same patent. So, it's a perfect example of getting two cracks at the same issue. But how is Saxon claiming that a "domestic industry" is at risk to the ITC? From all appearances, it seems to claim that its domestic industry is patent licensing itself. And, the argument goes, allowing the companies listed above to continue importing their mobile phones would hurt that "domestic industry." Many lawyers think this is a pretty big stretch, and hopefully the ITC agrees. If not, expect to see many more companies that do nothing but hoard patents get an extra high-powered weapon in trying to force companies who actually develop products to pay up.

For quite some time, we've been pointing out how patent holders have been using a bit of a loophole to get two separate shots at getting an injunction against other companies in patent disputes. This became even more popular after the Supreme Court ruled in the MercExchange case that injunctions banning the sale of goods often did not make sense. The loophole is that, rather than go through the court system, patent holders would go to the US International Trade Commission, claim that the goods they believed were infringing were an "unfair trade practice" and demand an injunction against importing them into the US -- effectively the same thing as a court injunction against sale (assuming the good was manufactured outside the US).

Since then, we see it's happening all the time that companies sue in the courts and use the ITC loophole as well. The ITC doesn't need to abide by the court's rules either, making it even easier to get an injunction this way. We found it quite problematic that patent holders were getting two hacks at the same ball -- especially when one of those hacks doesn't need to follow the Supreme Court's rules on when an injunction is and is not appropriate. Others disagreed with our assessment, claiming that it's not a loophole, but an important way to stop foreign companies from unfairly entering US markets.

Luckily, there's now some actual research looking into the details of how the ITC is used for these sorts of things. Eric Goldman points our attention to a law review article looking at data on how the ITC patent injunction process has been used over the past twelve years, and the results aren't pretty. It found that the ITC is used just as often between two American companies as it is used by an American company against a foreign company. Why the International Trade Commission gets involved in disputes between two domestic companies is not clear at all. It also found that many companies use both processes simultaneously, allowing them two separate attempts at getting the same injunction. Finally, the report finds that while there's only a slight increase in the likelihood of the ITC finding in favor of the patent holder, it's much more likely to grant an injunction barring the sale of a product.

As the report notes: "In the absence of coordination between the venues and with the high rate of parallel litigation, this two-track system may invite judicial waste and expose parties to the risk of duplicative litigation and potentially conflicting outcomes." Hopefully this will help Congress realize that the ITC loophole on patents needs to be closed.

Over the last year or so, we've seen two disturbing trends in enforcing patents. The first, is seeing patent holders suing a bunch of companies at once rather than just one or two, as used to be standard. They do this because they fear that some type of patent reform is coming, either via Congress or the courts. So they want to get as many patent suits in as quickly as possible. The second trend is that, rather than taking patent infringement cases through the court system (which is bound by the recent precedents set by the Supreme Court that loosen patent rules), they use a loophole: taking patent infringement claims to the US International Trade Commission (ITC). The ITC has the authority, if it believes that infringement occurs, to block the import of infringing goods. The ITC doesn't need to pay attention to what the courts say, and doesn't need to wait for the USPTO to review a patent. It can simply decide infringement occurred and ban the import of the goods. This is, effectively, the equivalent of an injunction against the product (just the sort of thing the Supreme Court said should be used more cautiously).

A Columbia professor has now picked up on both of these trends, getting the ITC to investigate 30 companies for violating her patents on LED and laser technologies. Among the companies investigated: Sony, LG Electronics, Hitachi, Toshiba, Panasonic, Motorola, Nokia, Pioneer, and Samsung. Whether or not these patents turn out to be valid, it's a cheap tactic to use the ITC rather than going to the courts to fight this battle.

A few months ago, we pointed out that since the Supreme Court made it clear that patent injunctions were being used too often, many companies were starting to use a loophole. Rather than just going through the courts to get an injunction, they would go to the US International Trade Commission and ask it for an injunction against those they accused of patent infringement. While courts need to follow the lead of the Supreme Court, the ITC could make whatever decision it wanted on whether or not a particular product actually did infringe and whether or not an injunction should be granted. It gives patent holders a second shot, outside of the court system, to get an injunction. In fact, right after we discussed this, Broadcom used exactly that loophole to get an injunction against certain Qualcomm chips. Qualcomm has been fighting this injunction without much luck, and it seems to have encouraged others to try the same thing. Nokia and Qualcomm have been engaged in a rather vicious patent fight recently -- and suddenly Nokia has come up with a strategy of (you guessed it) asking the ITC to ban the import of Qualcomm chips for patent infringement. Wonder where that idea came from? The folks at the ITC might want to start staffing up in the division that has to review these patent injunction requests. It sounds like there's going to be plenty to do in the near future.