Apple and HTC settle patent battle

So Apple have forced HTC to settle on the basis of dubious (prior art) patents (eg pinch-to-zoom) :wtf:
 
Saw some interesting views re why they might have settled over at The verge

Why Apple and HTC settled their patent litigation

Apple and HTC just announced a surprise settlement to their ongoing patent litigation, which spanned multiple lawsuits in courts around the world. The deal will see both companies drop all their charges and sign a 10-year patent cross-licensing agreement, which HTC says will "not have a material adverse impact" on its financials — meaning HTC is paying Apple at least some money.

It's completely unexpected news, especially after Apple won a comprehensive billion-dollar victory against Samsung for infringing many of the same patents. But a little reflection reveals that both parties had much more to gain from ending the dispute than from carrying on:

  • Apple's victory over Samsung is much less a predictor of future succes than you might think. Apple had essentially a perfect storm of facts in the Samsung case: the large number of Samsung devices that look exactly like Apple devices, the internal Samsung evidence showing the company directly tried to copy Apple, the massive sales of Samsung devices that could be used to calculate huge damages. Apple isn't going to get so lucky again. Especially not against HTC, which has a very different design language and comparatively tiny sales.
  • HTC is a much smaller target, and struggling to find a path forward in a market dominated by Apple and Samsung. At some point it's not worth it for Apple to fight a battle against an opponent that's falling behind in the marketplace anyway.
  • On the flip side, HTC probably thinks it's a better use of money to simply pay Apple and move on, rather than paying lawyers indefinitely. Apple has the money to keep this case going forever, but HTC has much bigger priorities.
  • HTC has also faced injunctions of its products by the ITC — the EVO 4G LTE was held up at Customs for infringing one of Apple's patents, and Apple complained that HTC's workaround was insufficient. HTC has also lost a few decisions internationally. The company could have kept fighting, but this is a much better use of time and money.
  • Both companies benefit from HTC's ability to use Apple's patented elements like slide-to-unlock, universal search, bounce scrolling, and scroll locking. HTC gets to make better products, and Apple allows one of Samsung's only real challengers in the US market compete with features Samsung isn't allowed to use— the enemy of Apple's enemy is Apple's friend.
  • Lastly, I am very curious to know how much HTC's new status as the lead partner for Windows Phone played a part in sealing these negotiations, if at all. Apple and Microsoft have a very friendly patent relationship, and if HTC has decided to focus on Windows Phone instead of Android it could have certainly helped wrap things up. That's total and complete speculation on my part, but it's something to consider.

Chances are we won't know the complete list of reasons both parties decided to settle for a long time — the terms of the deal are confidential, and neither company had much to say beyond their terse joint press release. But as it stands, Apple has now settled and reached license agreements with both HTC and Nokia, and only fully litigated the case against Samsung. The only major Apple lawsuit that's left is Motorola, a case that is now against Google directly. We'll see what happens.
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I have a strong feeling the Microsoft one might not be too far off the mark. It is kind of strange that Apple and Microsoft never seem to go directly at each other?
 
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AlphaJohn said:
Saw some interesting views re why they might have settled over at The verge



I have a strong feeling the Microsoft one might not be too far off the mark. It is kind of strange that Apple and Microsoft never seem to go directly at each other?
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Yep. They settled with HTC AND Nokia... So that leaves Samsung and Motorola which you can read as Google or you can read both as Android.
 
Remember Apple pays Nokia who are paired onto the Windows Phone platform so HTC also being paired onto the Windows Platform paying Apple just moves money around the ecosystems, when Microsoft's shareholders see Windows Phone do well they are happy, if Apple chows business from Windows Phone then Apples shareholdes - including Microsoft - do well.

I really wish people would realize that a Motorola and Apple agreement would not be a surprise particularly if Samsung fails in their US appeal.
 
Paul Hjul said:
Remember Apple pays Nokia who are paired onto the Windows Phone platform so HTC also being paired onto the Windows Platform paying Apple just moves money around the ecosystems, when Microsoft's shareholders see Windows Phone do well they are happy, if Apple chows business from Windows Phone then Apples shareholdes - including Microsoft - do well.

I really wish people would realize that a Motorola and Apple agreement would not be a surprise particularly if Samsung fails in their US appeal.
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Huh? Explain this sentence " if Apple chows business from Windows Phone then Apples shareholdes - including Microsoft - do well."
 
Paul Hjul said:
Remember Apple pays Nokia who are paired onto the Windows Phone platform so HTC also being paired onto the Windows Platform paying Apple just moves money around the ecosystems, when Microsoft's shareholders see Windows Phone do well they are happy, if Apple chows business from Windows Phone then Apples shareholdes - including Microsoft - do well.

I really wish people would realize that a Motorola and Apple agreement would not be a surprise particularly if Samsung fails in their US appeal.
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HTC pretty much had apple by the short hairs in a watertight LTE patent dispute. This is in no way a win for apple (if it was I'm sure you would have seen countless articles about it). Apple will be paying HTC a far larger royalty, as a win for HTC would have been an immediate ban on all Apple products with LTE (pretty much their entire new line).
 
HBee said:
HTC pretty much had apple by the short hairs in a watertight LTE patent dispute. This is in no way a win for apple (if it was I'm sure you would have seen countless articles about it). Apple will be paying HTC a far larger royalty, as a win for HTC would have been an immediate ban on all Apple products with LTE (pretty much their entire new line).
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Actually, the press release from HTC says they are paying Apple, but that it will "not have a material adverse impact" on their financials
 
JStrike said:
Actually, the press release from HTC says they are paying Apple, but that it will "not have a material adverse impact" on their financials
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This is one of those times that you cannot believe any press releases from either company. They are both trying to save face.
Why would apple care about HTC ? surely one less competitor is better for them. HTC was also wining its cases against apple all over the world (except US). Something strange sure is afoot, but I'm sure we will shortly see the effect of this agreement.
 
JStrike said:
Actually, the press release from HTC says they are paying Apple, but that it will "not have a material adverse impact" on their financials
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Well that's because the agreement is cross license, and no indication if HTC had them by the short hair or not. The payment calculation most probably stems from the fact that Apple owns way more patents than HTC does.

For Example HTC might just bring 3 patents and Apple bring 10 into the agreement.

HBee said:
This is one of those times that you cannot believe any press releases from either company. They are both trying to save face.
Why would apple care about HTC ? surely one less competitor is better for them. HTC was also wining its cases against apple all over the world (except US). Something strange sure is afoot, but I'm sure we will shortly see the effect of this agreement.
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See Microsoft. HTC is now a major partner with Redmond. Rumors are that HTC will focus on Windows Phone instead of Android.
 
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HBee said:
This is one of those times that you cannot believe any press releases from either company. They are both trying to save face.
Why would apple care about HTC ? surely one less competitor is better for them. HTC was also wining its cases against apple all over the world (except US). Something strange sure is afoot, but I'm sure we will shortly see the effect of this agreement.
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Nilay Patel has offered some analysis into the agreement, if you are interested
http://www.theverge.com/2012/11/10/3629516/why-apple-and-htc-settled-their-patent-litigation
 
AlphaJohn said:
Erm if you read it does point to the original in the top line where I Say The Verge :)
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I wasn't saying you didn't reference them correctly. I was just saying the reason I didn't link to your quote is that I don't like to link to a link.
 
JStrike said:
Huh? Explain this sentence " if Apple chows business from Windows Phone then Apples shareholdes - including Microsoft - do well."
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Microsoft is a shareholder of Apple, not as big a shareholder as they once were (they did a lot of profit taking in selling Apple shares when Apple shares rose monsterously) moreover several of Microsoft's institutional shareholders have holdings in both companies. There is a certain amount of betting on the other company as the second placed horse: You don't like the iPhone then Nokia running Windows Mobile is for you. Tired of Windows? Get a Mac. And so on.

The best thing for Microsoft's shareholders is for tech consumers to consume more tech and for the industry to constantly move within the parameters Microsoft envisages. Microsoft failed to get tablet computing going a few years ago, bam Apple gets things running and now Microsoft has Surface which is likely to be far more succesful than their previous tablet computing ventures. Ultimately though they need to have a gentleman's arrangement (the difference between this and a cartel is sometimes non-existant) with a rule against imitating.
 
Paul Hjul said:
Microsoft is a shareholder of Apple, not as big a shareholder as they once were (they did a lot of profit taking in selling Apple shares when Apple shares rose monsterously) moreover several of Microsoft's institutional shareholders have holdings in both companies. There is a certain amount of betting on the other company as the second placed horse: You don't like the iPhone then Nokia running Windows Mobile is for you. Tired of Windows? Get a Mac. And so on.

The best thing for Microsoft's shareholders is for tech consumers to consume more tech and for the industry to constantly move within the parameters Microsoft envisages. Microsoft failed to get tablet computing going a few years ago, bam Apple gets things running and now Microsoft has Surface which is likely to be far more succesful than their previous tablet computing ventures. Ultimately though they need to have a gentleman's arrangement (the difference between this and a cartel is sometimes non-existant) with a rule against imitating.
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Please provide evidence that MS *currently* holds any Apple stock. What you are claiming is a flat-out lie
 
JStrike said:
Please provide evidence that MS *currently* holds any Apple stock. What you are claiming is a flat-out lie
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Don't know if they still own any but I do know that they actually bailed out Apple when it was about to go belly up.

Edit: Google gave me this: http://www.quora.com/What-percent-of-Apple-does-Microsoft-own-from-their-$150M-buy-of-Apple-stock-in-1997-Did-they-sell-it# (Dated: Tue Jun 22 2010)

Steve Jobs announced that Microsoft would be making an investment of 150,000 shares in Apple (Series A, non voting, convertible preferred stock) worth about 150 million dollars. These shares would have been converible after a period of 3 years (2000) into common stock at a conversion price of $8.25. By 2001, all shares had been converted into Apple common stock, and in 2003, were sold by Microsoft.

Microsoft currently seems to own about 0.0046% of Apple through a private capital management fund, in which Apple has major stakes - it owns about 0.39% of itself. So I don't think that translates into MS owning much in Apple at this point.
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AlphaJohn said:
Don't know if they still own any but I do know that they actually bailed out Apple when it was about to go belly up.
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No they don't own any shares in Apple. In 1997 they made a payment of USD$150 million in Apple. Apple at the time had billions in the bank, and didn't need the money. What was important about the decision was getting a commitment from MS for IE and Office for the Mac.

Microsoft's $150 stock investment was the result of a settlement of a lawsuit. In fact, the investment was just an initial payment for other "substantial balancing payments" that would be spread out over then next few years, then Apple CFO Fred Anderson said at the time.

http://www.zdnet.com/blog/apple/stop-the-lies-the-day-that-microsoft-saved-apple/7036
 
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JStrike said:
No they don't own any shares in Apple. In 1997 they invested USD$150 million in Apple, which they cashed a few short years thereafter, making a tidy profit. Apple at the time had billions in the bank, and didn't need the money. What was important about the decision was getting a commitment from MS for IE and Office for the Mac
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Erm that is what I said?
 
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