Apple patent decision brings HTCs S3 buy into question - Mobile World Live

Apple patent decision brings HTCs S3 buy into question

22 NOV 2011

The US International Trade Commission’s (ITC) ruling that Apple does not violate any patents held by graphics technology company S3 Graphics has placed a question mark over the value HTC can get from its proposed acquisition of S3.

S3 complained to the ITC in May 2010 that Apple has infringed four of its patents for compressing and decompressing data for transmission in its iPhone, iPad, iPod Touch and some Mac computer devices and requested that the Apple products be barred from import to the US.

An ITC internal judge provisionally ruled in July that Apple only infringed two of the patents related to graphics chips with some Macs and not the iOS platform. HTC appealed this decision but the commission as a whole ruled on Monday that Apple hasn’t infringed any of the patents and closed the investigation. HTC said it may challenge the ruling, according to Bloomberg.

HTC announced its intention to buy S3 Graphics – along with its 235 graphics technology patents – for US$300 million in July in a deal seen to be bolstering its patent portfolio to defend against competitors. With the rejection of the S3 patent complaint, the value of these patents may be reduced.

At the time of the acquisition announcement Dow Jones Newswires reported that HTC CFO Winston Yung said the company intends to use the patents “defensively and offensively” in the future and that the company hoped to recoup the investment in two to three years. S3 was part owned by HTC Chairwoman Cher Wang, which Citigroup analyst Kevin Chang told Bloomberg meant HTC could licence the patents rather than buy the company outright.

The ITC recently rejected a separate HTC patent infringement complaint against Apple for patents covering technology for power management and phone dialling. The ITC said it will review the complaint in February 2012 to decide whether to uphold or reject the preliminary decision.


Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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