- One of the skirmishes is over. Apple and HTC have signed a 10 year license deal dismissing all outstanding patent litigation.
- As usual no details whatsoever have been released leaving everyone in the realm of speculation and conjecture.
- The first conclusion that one can draw is that someone blinked.
- Typically what happens in these cases is that one side has a sudden strengthening of its hand and the other side decides that it is time to settle.
- This is exactly what I believe happened with Nokia and Qualcomm 6 years ago and the same is very likely to have happened here.
- To date, Apple has had the upper hand in this case with wins at the ITC and HTC’s disastrous acquisition of S3 Graphics.
- Apple has also historically taken the position of refusing to licence its patents.
- Instead it has insisted that competitors design around them.
- Because none of its patents are standard essential, governed by FRAND, this is a perfectly reasonable position to take.
- For Apple and HTC to suddenly announce a deal, something must have changed which leads me to believe that it could have been something to do with HTC’s LTE patents.
- HTC acquired these patents in April 2012 and they are deemed to be standard essential for LTE meaning that (if true) the iPhone 5 and iPad will infringe them.
- Early September saw HTC starting to get more aggressive with these patents.
- Apple’s riposte against this case is that the patents are invalid.
- Not because they have no worth but because HTC doesn’t own them properly (as in the Google case) and that HTC simply bought them to assert them against Apple.
- Interestingly, Apple does not seem to have disputed the validity of the LTE patents themselves.
- Both of these complaints look very weak to me and my guess is that after some searching and analysis, Apple concluded that HTC finally had something that might stick.
- This is what could have led Apple and HTC to sit around the table and make a deal.
- For the first time, HTC would have had something to bargain with and it could have been this that led to the deal.
- The result is that I suspect that HTC will be paying Apple some royalties.
- This is because standard essential patents are unable to command royalties on a par with implementation patents and because Apple has had the upper hand most of the time.
- However, the LTE patents are likely to have ensured that they are not punitive, putting HTC in a better financial and legal position that it has been for some time.
- This deal is doubly useful for HTC as it sends a signal that it has something of value which should deter other aggressive lawsuits from other predators.
- The downside of course, is that HTC’s costs will now rise and margins will fall further, something that it can ill afford.
- I estimate that HTC will be paying Apple around 1% of the wholesale price of every infringing handset that it ships.
- The legal problem may now be fixed but HTC still has a huge mountain to climb in order to regain any of its former glory.
- At least now management is now free to concentrate on the assent of Everest rather than fighting legal claims.
- Every patent infringement dispute is different and I do not for one moment think that it signals a change in Apple’s IPR strategy.
- In my opinion, It also has no read across for the fight going on between Samsung and Apple and Motorola (Google) and Apple.
Qualcomm – Confident Outin ...
20 November 2024