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Acer strikes back at patent lawsuit

Acer strikes back at patent lawsuit

Acer has hired a lawyer that helped win a big patent case against Hewlett-Packard (HP) two years ago, to assist in its defence against two HP patent lawsuits, Acer's chairman has reveled.

The Taiwanese company has retained intellectual property lawyer Chris Ottenweller of Orrick, Herrington & Sutcliffe for its defense against the lawsuits, Acer chairman J.T. Wang told the company's first-quarter investors' conference in Taipei.

Ottenweller is known for representing EMC in a patent case brought by HP in which EMC emerged the victor. EMC filed a counterclaim against HP and the dispute ended in May 2005, with HP agreeing to pay EMC US$325 million in a settlement.

Acer hopes Ottenweller can do as well in its cases.

HP filed two lawsuits against Acer this year in the US District Court for the Eastern District of Texas, alleging that the company infringed on 10 HP patents related to PCs. HP is seeking jury trials and compensation from Acer, as well as treble damages for alleged intentional violation of the patents and payment of its legal fees.

The lawsuits come as Acer continues to gain market share in the global PC business, and some analysts have called the lawsuits a response to the inroads Acer has made in the US PC market.

Acer says it is investigating the claims internally and that the company respects the intellectual-property rights of others. It may also be planning legal action of its own.

"Acer is looking into the unlicenced use of its own intellectual property," Wang says, without referring to any companies by name. Acer owns approximately 1000 PC-related patents worldwide.

Most of Acer's designs are based on industry standards, Wang says. "We don't try to be unique," he says. In any case, he argued, Acer is protected by indemnification clauses in agreements held by its contract manufacturers. "The agreements are there, and the agreements are valid," he says.

Acer probably is protected by such clauses, which are included in patent licence agreements held by its contract manufacturers, according to Henry King, an analyst for Goldman Sachs (Asia) in Taipei.

HP officials were not immediately available for comment.

Acer's share of the worldwide PC market rose to 6.8 percent in the first quarter, up 46.1 percent over the same three months last year, according to market researcher Gartner. HP also increased its share of the PC market, and retained its crown as the number-one vendor with a 17.6 percent share, although its growth was slower than Acer's, at 28.7 percent.

Acer overtook Lenovo during the quarter to become the third largest PC vendor, while Lenovo dropped to fourth with a 6.3 percent share. Acer executives say they expect to increase PC shipments by 30 percent to 40 percent year-on-year this year.


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