In a suprise truce in Apple’s ongoing patent wars, the company has signed a 10-year licence agreement with Taiwanese smartphone maker HTC. HTC is thought to have paid Apple between $5 (£3.14) and $20 (£12.57) per handset that it produces using Android – Google’s operating system. HTC say that the deal will not have a material affect on its profit-and-loss account
The two firms have settled all their outstanding disputes over patents and signed a 10-year licence agreement that includes current and future patents held by one another. The companies had been suing each other for 32 months in Europe and the US, with Apple succeeding in temporarily preventing US imports of HTC phones.
HTC’s has seen its sales tumble since the second half of 2011 as it struggles to emulate the success of its rivals. It expects sales to be lower than expected at the end of the year. Apple has been embroiled in a series of high profile patent cases all over the world as the dominant player and its rivals accuse each other of copying designs and ideas. Legal cases between Apple and Samsung have been filed in more than 10 countries, with each accusing the other of copying designs.
In Britain a spat over a UK court decision that found in favour of Samsung has been ongoing for several weeks.
Patents blogger Florian Mueller wrote that “If litigation is the question, licensing is, once again, the answer. The settlement is surprising and unsurprising at the same time. The timing wasn’t expected since neither party had massive leverage over the other, but it makes a whole lot of sense that Apple would settle with HTC, and that HTC would accept the terms Apple has imposed (which were not disclosed but are likely somewhat onerous), prior to other Apple-Android settlements.
Mueller added that “Both companies simply have other priorities to focus on. For Apple, the competitive challenge it faces from Samsung and from Google’s plan to use Motorola Mobility’s patents to reach a point of mutually assured destruction are far bigger issues. If Apple wanted to be embroiled in litigation with a third Android device maker, HTC would no longer be the choice at this stage — Amazon, for example, would be a higher priority. And while HTC didn’t have to fear much from Apple’s litigation in the nearest term, it probably knew that it couldn’t win this fight in the long run, and it now needs to focus on its business. It recently lost market share and reported disappointing financial results. Google should finally recognize that Android devices need patent licenses, that Android is not free no matter how often Google says so, and that one Android device maker after the other will seek licensing arrangements with Apple, Microsoft, Nokia and other significant patent holders.”
