Confidential Agreement Ends Apple and HTC's Patent Feud - Wired (blog)

The HTC One X faced a U.S. Customs review in May to determine if it violated a 1996 Apple patent.
Photo: Ariel Zambelich/Wired

Apple and HTC ended their 32-month intellectual property battle Saturday, dismissing all lawsuits and announcing a confidential, 10-year license agreement that extends to current and future patents held by the tech giants.

“The most significant aspect of this deal is that it’s the first patent license Apple extended to an Android device maker,” intellectual property expert Florian Mueller told Wired by e-mail. “This is good news for consumers because it will allow HTC to focus on competing with Samsung and other Android device makers while compensating Apple for its contributions to innovation.”

Apple sued HTC in March 2010 over 10 patents related to user interface design. HTC was found to be in violation of one, a 1996 data-detecting function used to automatically convert URLs and phone numbers in e-mail and messages into live links that directly open into other apps, like a browser or phone dialer. This delayed the launch dates of products like the HTC One X earlier this year due to a brief import ban.

Mueller wrote in a blog post that the sudden settlement is both surprising and unsurprising: The timing was unexpected because neither party had significant leverage over the other, but it makes sense that Apple would come to a suitable agreement with HTC, and that HTC would eventually accept whatever terms Apple set forth, prior to any other Apple-Android suits being settled.

The conditions of the licensing agreement between the two parties are confidential, but likely hefty. With HTC being a much smaller threat, market share-wise, than other competitors like Samsung and Motorola, perhaps Apple softened its terms in order to cut its losses and dedicate money to worthier endeavors.

Indeed, both companies indicated they have bigger priorities to tend to. Apple’s and HTC’s CEOs issued statements in the settlement announcement saying the companies want to focus on innovation rather than costly intellectual-property legal battles.

“HTC is pleased to have resolved its dispute with Apple, so HTC can focus on innovation instead of litigation,” HTC CEO Peter Chou said.

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

Will this renewed focus on innovation extend to Apple’s many other IP suits, like the ongoing Apple v. Samsung case in the United States, or the iPhone maker’s issues with Motorola Mobility (one such suit was thrown out by a federal judge last week)?

“After today’s announcement, there’s a chance that Apple will be able to strike some deals without having to litigate,” Mueller said. “But Samsung and Google are probably more difficult to do a deal with than HTC. These deals will happen but it’s impossible to predict how quickly the arrangements will fall into place.”

Although Apple and HTC reached a truce, the patent arms race will likely continue for quite some time.