In May, HTC said availability of its HTC One X and HTC EVO 4G LTE handsets was delayed due to a U.S. customs review required after an exclusion order by the ITC. The company said it redesigned devices to remove disputed technology while maintaining it breached no patents.
The delay pushed back a release of the devices by Sprint Nextel Corp., which had planned to offer the LTE model to help boost subscriber numbers.
Less than a month later, HTC cut its second-quarter sales projection by 13 percent, citing a delay in U.S. shipments and weaker-than-expected sales in Europe.
In July, the ITC ruled that HTC could keep shipping its devices while the agency investigated whether the phones violate the exclusion order, denying an emergency request by Apple to have the handsets halted at the U.S. border.
Apple’s complaints included claims HTC copied the iPhone maker’s technology for detecting phone numbers in e-mails, allowing users to save the information or make a call without dialing. The dispute, which include a case filed in London, also included Apple accusing its competitor of copying other features such as “slide to unlock,” multiple screen touches and using various alphabets when sending messages.
HTC’s rebuttal included its $300 million purchase of 3G Graphics Co., a company part-owned by HTC Chairwoman Cher Wang, in a bid to leverage that company’s patent claims against Apple to bolster its own defense. The ITC ruled in November 2011 that Apple’s Macs didn’t infringe two S3 Graphics patents.
A separate case before the ITC may have forced Cook to the negotiating table after a judge said Apple probably would face difficulty getting a series of HTC patents invalidated. HTC bought those patents, covering technology in LTE high-speed wireless devices, from ADC Telecommunications Inc. for $75 million.
“The settlement is a big surprise and is likely due to HTC’s LTE patents, which it bought from ADC last year, as Apple’s LTE patents are relatively weak,” said Jeff Pu, an analyst with Fubon Financial Holding Co. in Taipei who raised his price target for HTC today to NT$270 from NT$160. “What HTC still needs, though, is good products.”
Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.