Mon, Nov 12, 2012 - Page 1 News List

HTC, Apple agree patent settlement

HAPPY ENDINGApple’s chief executive said that the company was pleased to have reached a settlement with HTC and would stay ‘laser-focused on product innovation’

By Helen Ku  /  Staff reporter, with CNA

A woman walks past an HTC store in the Yonghe District of New Taipei City yesterday.

Photo: Mandy Cheng, AFP

Smartphone maker HTC Corp (宏達電) yesterday said it has settled a patent lawsuit with Apple Inc, bringing an end to the prolonged patent disputes between the companies.

In a joint statement issued by HTC and Apple yesterday, the companies said they had reached a global settlement that includes the dismissal of all current lawsuits and sets up a 10-year license agreement that covers the current and future patents held by both parties.

“HTC is pleased to have resolved its dispute with Apple, so it can focus on innovation instead of litigation,” HTC chief executive Peter Chou (周永明) said in a statement.

“We are glad to have reached a settlement with HTC,” Apple chief executive Tim Cook said. “We will continue to stay laser-focused on product innovation.”

The companies did not provide details of the settlement, saying: “The terms of the deal were confidential.”

Asked if HTC and Apple’s deal would have a substantial impact on the nation’s export performance, Bureau of Foreign Trade Deputy Director-General Chen Ming-shy (陳銘師) said that the agreement might boost the smartphone producer’s sales, increasing export orders.

“The settlement is good for HTC and its export prospects. It helps the company accelerate its recovery from recession,” Chen said.

Mega Investment Trust Corp (兆豐國際投信) senior analyst Kevin Hsu (許鈞雄) was also positive about the settlement.

“The amicable resolution means HTC will not have to pay for lawsuits. It might help HTC achieve better financial targets this quarter, regaining investors’ confidence,” Hsu said.

Since 2010, HTC and Apple had been at loggerheads over technology patents that confer the sole rights to invent smartphone products running Google’s Android and Apple’s iOS operating systems.

The deal represents the first time Apple has reached a patent settlement with a courtroom opponent, analysts said.

Jeff Pu (蒲得宇), an equity research analyst at Taipei-based Fubon Securities (富邦證券), said the settlement may imply that Apple needs to strengthen its patent portfolio for long-term evolution (LTE) 4G technology, in which it has been lagging behind its major rivals.

“The settlement gives HTC a greater advantage in its market positioning in the US,” said C.K. Lu, a Taipei-based analyst at research firm Gartner Inc.

“HTC still values the US market,” he said. “The case implies that although HTC has been performing well in China, it could not make up what it had lost in the US market.”

Lu said HTC’s branding is likely to improve with the settlement because consumers may no longer consider HTC as a “copy brand” as a result of it losing consecutive patent lawsuits against Apple over the past two years.

However, the financial impact on HTC will depend on how it pays the settlement to Apple, Lu said.

If HTC makes a one-time settlement in the current quarter, it will be able to improve its operations from the first quarter of next year, he said.

If it decides to pay the settlement in units of products, this could give rise to concerns about its financial burden in the long term, Lu said.

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