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ITC to Probe Nokia, HTC Lawsuit

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The U.S. International Trade Commission (ITC) has agreed to investigate Nokia Corporation’s (NOK - Free Report) patent infringement case against HTC Corporation. The litigation accuses HTC of violating six of Nokia’s patents. Notably, Nokia and HTC have been engaged in legal battles over patent disputes for quite some time.

ITC will investigate Nokia’s allegations, which claim that HTC has violated Nokia’s video processing, internal smartphone design and radio transceiver technology. Additionally, the lawsuit accuses HTC of breaching Nokia’s method and computer program patents that are used for signalling tags.

In its complain to the ITC, the Finnish handset manufacturer wants an import ban on several of HTC’s smartphones, including some of last year’s ‘HTC One’ models. Nokia also lodged a federal suit in Southern California to stop HTC from violating its patents and has asked for unspecified damages.

This is the second complaint to ITC as Nokia had earlier filed a case against HTC for using its power saving technology, which saves battery life when connected to a network. Nokia has filed similar cases against HTC in the U.K. and Germany.

Nokia further argues that HTC has not put a halt to its practices in spite of the Lumia developer winning the case in the German court. Instead, HTC has shifted the accountability to its suppliers.

Nokia has the strongest patent portfolio in the wireless industry, and has spent almost $62 billion in research and development in the last two decades. Furthermore, 41 mobile handset manufacturers use Nokia’s patents through patent licensing agreements.  Nokia receives a healthy royalty from these agreements and would give its best to protect this fee-based income, as the company struggles to regain smartphone leadership.

Earlier, Nokia had also charged Apple Inc. (AAPL - Free Report) and Research In Motion Limited. with patent cases and has been successful in winning it them. Nevertheless, Nokia has suffered some setbacks in its attempt to protect its patents. The company has lost some patent lawsuits against HTC in Germany over the use of Google Inc.’s play app and content store client app in the Android-based devices.

Although ITC’s probe does not necessarily indicate a victory for Nokia, the legal body has the power to impose an U.S. import ban on some of HTC’s devices if found guilty. We believe Nokia will continue its legal fight against HTC to weaken its main Windows phone rival.  

Nokia currently carries a Zacks Rank #3 (Hold).

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