x Abu Dhabi, UAEWednesday 17 January 2018

Apple and HTC reach global patent agreement

The Taiwanese tech firm was accused of copying iPhone features.

Apple and HTC swallowed their differences and settled all global lawsuits with a 10-year licensing agreement at the weekend.

The move ended a dispute that threatened their shipments of mobile devices.

"This is definitely a positive surprise for HTC," said Daniel Chang, an analyst at Macquarie Group in Taipei.

Apple, which had accused the Taiwanese tech company of copying features that made its iPhone unique, "will continue to stay laser-focused on product innovation", said Tim Cook, the chief executive of Apple.

Peter Chou, the chief executive of the Asian firm, was equally upbeat.

"HTC is pleased to have resolved its dispute with Apple, so HTC can focus on innovation instead of litigation," he said.

HTC had retaliated against Apple's charges by accusing the American maker of iPads and MacBooks of infringing its wireless patents.

An Apple complaint to the United States international trade commission sought to block imports of HTC smartphones because the devices allegedly copied the iPhone's pinch-to-zoom feature.

HTC fought back, alleging infringement of patents it bought last year for ways to reliably transmit a larger amount of data. Both parties declined to provide details of the settlement.

"The shares will probably get a bump on this news, though it doesn't solve the structural problems at [HTC]," said Mr Chang.

Shares of HTC have fallen 55 per cent this year in Taipei trading, after a 42 per cent drop last year spurred by continued market-share losses, falling sales and lower profit.

In May, HTC said availability of its HTC One X and HTC EVO 4G LTE handsets was delayed because of a US customs review required after an exclusion order by the International Trade Centre.

The company had said it redesigned its devices to remove disputed technology while maintaining it breached no patents.

Less than a month later, HTC cut its second-quarter sales projection by 13 per cent, citing a delay in US shipments among the reasons for the second lowering of its revenue projection in three quarters.

A separate case before the ITC may have forced Mr Cook to the negotiating table after a judge at the agency said Apple would be likely to face difficulty getting a series of HTC patents invalidated.

HTC bought those patents, which covered technology used in LTE high-speed wireless devices, from ADC Telecommunications for US$75 million (Dh275.4m).

Analysts project HTC will post a record 37 per cent decline in revenue for the year.