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You are here: Home / Business Briefing / HP Targets Acer in New Patent Lawsuit
HP Targets Acer in New Patent Lawsuit
HP Targets Acer in New Patent Lawsuit
By Jennifer LeClaire / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
After enduring the legal spotlight for several months in the pretexting case that shook up the corporate ranks, Hewlett-Packard on Tuesday filed a lawsuit of its own. In the U.S. District Court for the Eastern District of Texas, HP is suing Acer for infringing on five of its patents.

Specifically, HP claims Taiwan-based Acer and its U.S. subsidiary Acer America infringed on patents for DVD editing, processing capabilities, power management, clock switching, and other technologies between 1997 and 2003. The leading PC maker is seeking an injunction and unspecified damages against its smaller competitor.

In a published statement, HP said the suit was necessary "because HP believes Acer has been selling computer products that use HP's patented technologies without permission. HP respects the intellectual property rights of others and expects the same treatment in return."

Acer Answers

In a statement published on the company's Web site, Acer executives said the company "respects the intellectual properties of third parties and is currently conducting a full investigation of these allegations made by Hewlett-Packard."

Interestingly, Acer also took an offensive stance in its statement, reminding that it has obtained "substantial intellectual property" and saying it expects others to respect it. The company said it is "prepared to take all necessary steps to protect and enforce [its] patented technologies against unlicensed use."

HP settled a lawsuit against Gateway last year in which the latter took a similar stance. HP sued Gateway for IP infringement and Gateway filed a countersuit on the same claim. Gateway ended up paying HP $47 million and entering into a limited cross-licensing agreement. Analysts said Acer might play a similar card.

Jockeying for Position

The suit follows on the heels of a breakthrough quarter for HP. The tech giant landed atop global PC rankings with an 18.1 percent share, according to IDC. Acer garnered 7.1 percent of the market to rank fourth, behind No. 2 Dell and No. 3 Lenovo.

HP posted nearly 24 percent year-over-year growth in January, while Acer posted a whopping 37 percent growth in the fourth quarter of 2006, with expansion in the United States helping to boost the gains. Acer's recent gains might be the motivation behind the suit, according to Roger Kay, a former IDC analyst and president of Endpoint Technologies Associates.

"HP doesn't want Acer to use its intellectual property without paying for it and then essentially underprice HP in the U.S. market and take market share," Kay said. "This suit has harassment value for HP even if it doesn't win because it will take Acer U.S. executives' focus off of building its business here."

Enterprise customers shouldn't feel much impact from the case, unless HP loses. Acer could potentially repeat its European success and become the top laptop vendor in the U.S., Kay said, if judges don't see things HP's way.

"HP is concerned," Kay said, noting that the case will probably settle out of court. "Acer is more threatening today than it was a few years ago."

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