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] might face in what appeared to be a threatened legal battle with Palm [PALM 7.98 --- UNCH (0) ] and its new Pre touch screen smart phone. Or any other comers that Apple deemed as "ripping off" its intellectual property, as Chief Operating Officer Tim Cook put it on the company's earnings call recently. This morning, wireless analyst Pablo Perez-Fernandez of Global Crown Capital is out with the most detailed note yet as to just how difficult — and financially dangerous — Apple's battle could be, if it decides to go after Palm.
His report this morning says that if Apple goes after Palm, it could also wage patent war against HTC [HTC 8.75 --- UNCH (0) ] , Garmin [GRMN 17.44 --- UNCH (0) ] and Research in Motion [RIMM 55.96 --- UNCH (0) ] since all of them use some form of the "multi-touch" interface, specifically the "pinching" motion to control images on the screen. However, Perez-Fernandez points out that the US Patent Office may have erred in its awarding of the Apple patent, that the firm's research indicates that Apple's own patents, indeed its technology, may be in violation of a patent already awarded to the University of Delaware, and that if Apple proceeds with threatened litigation, it may end up with no protections of any kind when it comes to the multi-touch interface for both iPod and iPhone.
I messaged with Perez-Fernandez this morning who says this all comes down to the notion of "prior art."
"That means that the invention of key element of any of the claims in the patent was published, patented, and release before this patent was filed," says.
In this case, he argues that the Bell Labs work with transparent capacitive sensors overlaid on a CRT would qualify as prior art. So would all the other patents and work from universities that use many of the same gestures that Apple has or is attempting to patent.
He says the notion of "prior art" is precisely the reason why RIM lost its case against patent holder NTP (and well over $600 million in the process.)
"In the NTP lawsuit, RIM got in hot water for not disclosing prior art to the USPTO. Failing to do so can invalidate claims in a patent," he tells me.
This all gets traced back to Wayne Westerman, and his partner John Elias, who hold the multi-touch patent.
"The key here is that Westerman's Ph.D. thesis shows he was aware of Bell Labs and other prior art and gestures such as pinching," says Perez-Fernandez.
"Also, Westerman's key patents were earned when he worked for the University of Delaware. That means, they belong to the University and some of the later patents may not be innovative enough to deserve getting granted."
And he also suggests that Apple might have a bigger target in mind than tiny Palm, still with no release date or price on the Pre.
"They are also trying to pre-empt Microsoft's use of multi-touch in Windows 7 and they are trying to trademark multi-touch, which is ridiculous since the term has been used openly for a long time."
Perez-Fernandez argues that Apple has no legal ground to stand on, and while the sabre-rattling might be rattling some competitor stocks, if Apple were to move forward with any litigation based on this, it could prove more threatening to itself than to any of its rivals.
As I have written before, this issue ain't disappearing any time soon, but if Perez-Fernandez's arguments carry some weight, Palm investors might have a little less to worry about.
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