Apple Patents Cause A Stir

Story first appeared in the Wall Street Journal.

Customers shopping for Apple Inc.'s iPhone might pay little attention to the gadget's "slide to unlock" feature, but you would never know that from a quick glance at Apple's current roster of patent lawsuits.

The technology giant has secured two key U.S. patents on slide-to-unlock—a technology that lets users wake a dormant phone with a finger-swipe across the screen. And it is wielding those patents like swords against rivals around the world.

In recent months, Apple has sued HTC Corp. in Delaware and Germany over one of those patents and others. It has used the patents to fight back against suits Motorola Mobility Holdings Inc.  filed against it in Miami and Germany. And it has invoked them in lawsuits against Samsung Electronics Co. in Australia, the Netherlands, and San Jose, Calif.

As competition in the more than $200 billion global smartphone industry becomes more cutthroat, Apple and its competitors argue that even the most minor unique features are crucial to getting an edge.

They are engaged in a lawsuit-filing frenzy, asserting their rights to dozens of patents to block rival products.  Their goal: to find a patent that sticks, and to force competitors to work around it or strike a licensing deal.  Slide-to-unlock is one of those patents, though it hardly seems central to a smartphone. Its history—and future—show how today's battles are being waged.

About five years ago, the computer and mobile-phone industries collided. Technological advances turned phones into minicomputers, complete with email, Web access and other features.

Companies from different corners of industry saw opportunity—and pounced. Among them: phone makers like Nokia Corp.  and Motorola; computer-hardware makers like Apple; software giants such as Google Inc. and Microsoft Corp.; and others, including South Korean electronics giant Samsung.

From the get-go, companies fought fiercely for consumer dollars with huge marketing blitzes.

Behind the scenes, another battle was brewing over intellectual property. Almost overnight, every player had developed a gripe. The traditional phone makers claimed, for instance, that Apple was abusing their long-held rights to data-transmission designs. Apple complained others were ripping off its designs.

In the past two years, legal disputes have erupted over digital-image storage methods, camera designs, Wi-Fi technologies and well-known software applications like email and calendars, as well as secondary features most consumers barely notice.

The stakes are rising for Apple. Despite the iPhone's popularity, its market share has been eclipsed by phones that run Android, Google's mobile operating software.

Fueling the fire at Apple: a sense among executives there that rivals are blatantly stealing its designs. Apple co-founder and CEO, who died in October, said in an authorized biography that he would "spend every penny" to fight copycats.

The current Apple CEO told investors in October that Apple spends a lot of time and money and resource in coming up with incredible innovations. And they don't like it when someone else takes those.

Through litigation—or the threat of it—Apple has prompted companies to install time-consuming and, in some instances, costly "workarounds" to avoid infringing its patents.
But Apple has yet to permanently knock any of its competitors' products out of the market.

Several rivals, meanwhile, have struck back against Apple, accusing the company of using their own patented designs.

At the center of the war is slide-to-unlock. It dates to late 2005, more than a year before Apple announced a product with a touchscreen.

Three diagrams from a patent awarded in 2012 to Swedish company Neonode that surprised both Apple and Samsung. Neonode first made its patent claim in 2002, three years before Apple's application.

The first iPhone was in the works at the time, and Apple's software engineers, including one of its current senior vice presidents, felt the need for a feature that would prevent the phone from accidentally making a call or sending a text message when pulled from a pocket or jostled in a purse.

Apple's engineers regarded slide-to-unlock as important because it flavored a user's first experience with the device, according to a person familiar with the matter. The team tried many iterations, this person said, from different finger-swiping speeds to different-shaped motions.

Two days before Christmas 2005, Apple filed a patent application with the U.S. Patent and Trademark Office containing a handful of rudimentary drawings with ovals and circles.

The diagrams showed an early version of the design that current iPhone models use: a white rectangle with rounded edges that, when touched and dragged to the right, slides alongside a horizontal channel until the device "unlocks" and opens to the home screen.

The patent office granted Apple the patent four years later, in early 2010. That March, Apple sued HTC in Delaware for allegedly infringing slide-to-unlock and other features.

According to a person familiar with the matter, Apple felt that it would be a good starter case because the company thought it was particularly easy to see that HTC had imitated the iPhone interface—by using similar rows of icons, for example.

A spokesman for HTC declined to comment.

Several months later, Apple asserted claims against Motorola in Florida, where Motorola was already suing Apple, alleging that over a dozen Motorola products violated Apple's slide-to-unlock patent.

The slide-to-unlock used on many Motorola phones resembles Apple's in many ways. Users open the phone by dragging a finger from left to right across the bottom of the phone's screen. But the visual representations of the sliding motion are somewhat different.

Apple users see a white rectangle move across the screen while, with the Motorola phones, the slide of a finger extends a bar across the screen. Partly for this reason, Motorola claims its so-called "stretch to unlock" doesn't infringe Apple's patent.

Samsung, however, posed a unique challenge for Apple on slide-to-unlock. While Apple was waiting for its patent to be issued, Samsung unveiled phones that opened when a user touched the center of a circle on the screen, and dragged a finger to any point outside the circle.

Samsung's design was different, but in the mind of Apple executives, not different enough. So, in 2009 Apple went back to the patent office, according to a person familiar with the matter, and asked for a patent that would cover a wider variety of slide-to-unlock designs.

Apple got such a patent last October, and in February the company filed suit in San Jose against Samsung, alleging Samsung violated an array of patents, including slide-to-unlock.

Earlier this year, the combatants all got a surprise: an obscure Swedish touchscreen maker called Neonode Inc. disclosed that it had received a patent for a version of slide-to-unlock. Its technology let a mobile-device user switch from one application to another by swiping a finger across a screen.

The company, which briefly made a line of phones prior to a 2008 bankruptcy, had used the mechanism in one of its models.

Neonode declined to comment. But in a recent Apple-Samsung battle over slide-to-unlock in the Netherlands, Samsung held up Neonode designs as examples of "prior art," or evidence that Apple's patents on slide-to-unlock should never have been granted in the first place because someone else had actually beaten Apple to the idea.

A person close to Samsung said the company is likely to use Neonode's patent to try to knock out Apple in the San Jose case. Samsung has other arguments as well: Sliding locks have been around since the Middle Ages, and Apple didn't invent touchscreens. The combination of the two fits the definition of obvious.

In Apple's only win so far on slide-to-unlock, a judge in Munich ruled in February that two of Motorola's designs violated a European version of Apple's slide-to-unlock patent.

Motorola, however, quickly "designed around" Apple's patent, and its phones remained on the German market.

Many intellectual-property experts think that the smartphone war will end in a flurry of licensing and cross-licensing agreements, but that it's taking way too much time and money to get there.

When you have companies spending hundreds of millions in litigation, something is seriously wrong with the patent system.

For more technology related news, visit the Electronics America blog.