HTC and Apple jointly released a statement yesterday(Nov.11)saying that both parties have reached a global settlement agreement to eradicate all patent litigations between the two parties and sign a 10-year mutual patent licensing contract,thereby ending over two years of patent war between them.
In the joint statement,Peter Chou,chief executive officer of HTC,expressed that''HTC is pleased to have resolved its dispute with Apple,so HTC can focus on innovation instead of litigation.''Tim Cook,CEO of Apple,also pointed out that''We are glad to have reached a settlement with HTC.We will continue to stay focused on production innovation.''
Cher Wang,chairperson of HTC,remarked that the settlement with Apple is a positive development for both HTC and Taiwan.
Both parties refused to reveal the settlement fee.Institutional investors estimated that under the mutual patent licensing agreement,HTC would pay less than US$5 per unit of royalty to Apple,similar to the amount paid by HTC to Microsoft for its Windows phone.Institutional investors wonder whether HTC would pass the royalty payment to consumers.
Institutional investors calculated that HTC will ship 30 million mobile phones this year.Based on the royalty of US$5 per unit,HTC will have to pay US$150 million(NT$4.37 billion)to Apple a year,accounting for one quarter of HTC's net after-tax profits of NT$15.772 billion in the first three quarters this year.
HTC noted yesterday that the licensing contract for the settlement will not have major influence on the company's finance,adding that its stands by its original forecast for reaching NT$60 billion of revenue in the fourth quarter.
Apple first filed suit against HTC with U.S.International Trade Commission and Delaware district court in March 2010,charging the latter for infringing on its 20 patents,including user interface and underlying architecture and hardware of iPhone.Two months later,HTC filed a counter charge with ITC against Apple for encroaching on its five patents.Last December,ITC rendered a final ruling according to which HTC only infringes on one patent of Apple.The final court verdict on the litigation is due to come out at the end of this month.
The settlement will pave the way for HTC to stage a comeback to the U.S.market,as its share in the U.S.smart-phone market has dropped to 6.4%now,compared with the peak level of 23%,due mainly to the litigation.In the future,it will not have to worry about the infringement on Apple's patent right in marketing its products worldwide,since the mutual licensing agreement covers all current and future patents held by both parties.
