(Adds analysts' comments)
By Ian Sherr
Apple Inc. (AAPL) and HTC Corp. (HTCXF) announced a broad
ten-year licensing agreement that settles all of the lawsuits
between the companies around the world.
The two companies said late Saturday that the agreement covers
current and future patents for both firms. More specific terms of
the deal were not disclosed.
"HTC is pleased to have resolved its dispute with Apple, so HTC
can focus on innovation instead of litigation," Peter Chou, HTC's
chief executive, said in a statement.
Tim Cook, Apple's chief executive, also expressed relief in a
statement. "We will continue to stay laser focused on product
innovation," he said.
An Apple spokesman declined to comment further about the
agreement. An HTC spokeswoman also declined to provide specifics of
the deal but said the company does not expect the license agreement
to have an adverse material impact.
The broad patent deal comes after HTC suffered several legal
setbacks, such as a decision by the U.S. International Trade
Commission that said Apple's iPhone and iPad mobile devices had not
infringed HTC's patents. The Taiwanese handset maker had put a lot
of effort into its litigation, including a $300 million cash
acquisition of S3 Graphics Co., which HTC said was purchased with
the intention of using that company's patents in its ongoing legal
battles. In a separate case, the ITC found HTC's phones infringed
Apple's patents.
HTC warned last month its revenue and margins will likely
decline in the fourth quarter.
"The settlement is positive for HTC because the patent suits
have been a major overhang resulting in uncertainty on its share
price," said Daiwa analyst Birdy Lu. "I believe HTC is likely to
make payments to Apple even if what they agreed on is of
cross-licensing nature because Apple's patent portfolio is much
stronger than HTC."
In striking the settlement, HTC joins Nokia Corp. (NOK) as the
latest handset maker to have settled litigation with Apple. Nokia's
settlement, announced last summer, included a payment from
Apple.
The settlement comes as Apple has become an epicenter of a
global patent war among industry titans, including Samsung
Electronics Co. (SSHNY, 005930.SE) and Google Inc.'s (GOOG)
Motorola handset unit.
Apple was asked several times to attempt a settlement with
Samsung during its high-profile case in a California court several
months ago. Heads of both firms held talks, but they were unable to
strike a deal. Apple ultimately won the case, with a jury awarding
it $1 billion in damages. Samsung said it will appeal that
decision.
Mr. Cook has expressed interest in settling those cases as well,
on conference calls and in interviews, but so far neither Apple nor
its remaining courtroom opponents have been able to reach
agreements.
"I don't think the pact with HTC implies Apple is going to do a
similar settlement with Samsung," said RBS analyst Wanli Wang. Mr.
Wang said Apple likely settled with HTC because it "no longer
considers HTC a threat, but Samsung is a big and major competitor,
so I don't think Apple will go easy on it."
--Aries Poon in Taipei contributed to this article; Write to Ian
Sherr atian.sherr@dowjones.com
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