HP sues Acer for patent infringement

Hewlett-Packard, the world's largest PC vendor, filed suit against its fastest growing rival on Tuesday, alleging the infringement of five patents.

HP is seeking compensation from Acer and a U.S. subsidiary of the company for allegedly selling PC products in the U.S. that infringe on its patents, according to court documents. The complaint was filed in the U.S. District Court for the Eastern District of Texas.

"Acer's legal division is looking into this issue and we have no comment at this stage," said Henry Wang, senior public relations director for Acer, in Taipei.

HP alleges that the Taiwanese company knowingly violated the patents, which are related to optical drives, clock frequency switching, and power consumption. HP is seeking a jury trial and compensation for the use of its technology in Acer PC products, as well as treble damages for intentional violation of the patents and the payment of all its legal fees.

HP became the world's largest PC vendor in the fourth quarter of last year, according to market researcher IDC. Acer took fourth place, although it clocked the strongest growth by any company in the top 10 ranking. Dell was second, and Lenovo Group took third.

The lawsuit may be an attempt to slow Acer's breakneck growth and its expansion in the U.S., according to Henry King, an analyst for Goldman Sachs (Asia) in Taipei. He said that Acer is probably protected in the patent dispute by cross-licenses held by the companies that contract manufacture PC products on its behalf. Most major PC companies, including HP, Acer, and Dell, farm out production to the same contract manufacturers in Taiwan and China, and the contract manufacturers try to sort out patent issues through cross-licenses.

Acer has been continuously growing its PC shipments and gaining market share in various markets, particularly in notebooks, making it "a threat that leading PC vendors cannot afford to neglect," King wrote in a report on Wednesday.

"We understand why competitors would desire a halt to Acer's expansion in the U.S. market," he wrote.