On July 15, the U.S. International Trade Commission found HTC guilty of infringing on two Apple patents. HTC may be barred from bringing phones into the U.S. if this decision is upheld. Last year HTC agreed to pay Microsoft $5 per Android device sold. That deal only covers Microsoft's patents though, and potentially Nokia's as well since the software giant now has an access to Nokia's intellectual property. Apple's patents are a different matter.
This loss prompted Google Executive Chairman Eric Schmidt to defend HTC. Schmidt was asked if Google would provide financial support for HTC if it were to ultimately lose this case. His response was "we will make sure they don't lose, then."
He then went on to accuse those suing as simply being jealous of Android's success in the market. "We have seen an explosion of Android devices entering the market and, because of our successes, competitors are responding with lawsuits as they cannot respond through innovations."
Schmidt can bluster about innovation and share all he wants, but that won't make these suits go away. In addition to HTC's $5 per handset settlement, Microsoft is trying to get Samsung to pay $15 per handset. Samsung is reported to be trying to settle for $10. These companies aren't settling for millions of dollars because these claims are without merit.
Google's problem is it doesn't have a strong intellectual property portfolio, at least when it comes to mobile phones. It lost a bid for Nortel's patent portfolio to a consortium of Microsoft, Apple, RIM, and others. Best case, this gives Microsoft and Apple additional protection from any patent infringement suits against them. Worst case, it gives both companies more ammunition with which to go after Google's mobile phone partners.
Schmidt wasn't clear on what he meant when he said Google wouldn't let HTC lose. It could unleash its own attorneys, at its expense, to defend HTC, or it could work out some sort of financial arrangement with Apple for the two patents in question. We'll have to see how this unfolds as the fight to overturn the ITC's ruling progresses.