Apple and HTC Settle Global Patent War

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Apple and HTC have agreed to end their patent lawsuits pending in courts all over the world after settling on a 10-year licensing contract. The companies did not reveal the financial details of the arrangement, but analysts believe HTC will pay Apple $6 to $8 for every smartphone it ships.

Nick Wingfield with The New York Times wrote, “Apple has shut down one front in what Steven P. Jobs, the company’s late chief executive, once described as a thermonuclear legal war against Android, Google’s mobile operating system. But a wider truce in the patent battles engulfing the mobile industry is most likely still a long way off. Late Saturday, Apple and HTC, the Taiwanese smartphone maker, announced they had agreed to dismiss a series of lawsuits filed against each other in a feud that started more than two years ago when Apple accused HTC of improperly copying the iPhone. The companies said their settlement includes a 10-year license agreement that grants rights to current and future patents held by both parties.”

CNET’s Don Reisinger speculated, “Apple’s patent-licensing settlement with HTC might actually net the company some more cash. Sterne Agee analyst Shaw Wu said in a note to researchers today that he has spoken with industry sources who told him that Apple will generate about $6 to $8 in licensing fees for each smartphone HTC ships in 2013. Based on his estimate of 30 million to 35 million shipments, Wu believes that Apple will generate $180 million to $280 million in licensing fees.”

Dan Levine from Reuters noted, “Late last year, the U.S. International Trade Commission ruled that HTC had infringed upon one of four patents Apple had disputed and imposed a sales ban on some of the Taiwanese maker’s phones. Though HTC said it had devised a technical workaround to Apple’s patents, the company announced in May that shipments of its phones were being held up by U.S. customs officials.”

Time’s Sam Gustin commented, “This deal, announced late Saturday night, could — I emphasize the word could — augur a new phase in the great digital intellectual property wars that have roiled the technology industry for the last decade. At a minimum, the pact is a bold move by Apple CEO Tim Cook… This deal, the financial terms of which were not disclosed, is the most important strategic move that Tim Cook has made during his tenure, and signals a new and welcome pragmatism by Apple as it continues its proxy-war against Google and Android.”