Buying HTC won’t solve Samsung’s Apple patent problem

Nov 21, 2012
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Buying HTC won’t solve Samsung’s Apple patent problem

Apple's licensing deal with HTC has been carefully structured to prevent third-parties such as Samsung from gaining patent protection by strategically acquiring the struggling phone manufacturer, it's been revealed. The agreement between the two firms was announced earlier this month, though neither Apple nor HTC would confirm much in the way of details; however, according to a heavily redacted version found by FOSSPatents, there's a special clause present which automatically invalidates the deal should either Apple or HTC be taken over.

"In the event of a Change of Control of a party," the clause reads, "this Agreement shall automatically terminate unless otherwise agreed in writing by the Parties, effective immediately prior to such Change of Control." A "Change of Control" is defined as a transaction whereby the participants in the original deal are not left with at least 50-percent of the voting power afterwards, or where one is merged or consolidated with a third party or group of third parties.

The clause can by worked around by securing prior permission by both Apple and HTC, though that seems unlikely to be granted should Samsung attempt to sneak into a favorable patent agreement by throwing some cash at HTC. Given the difference between Samsung's financial position and that of HTC, such a deal would not be impossible.

Samsung is currently attempting to see an unredacted copy of the full agreement, arguing that the deal - and the value Apple places on the patents in question - has a potentially significant impact on its own ongoing litigation with the Cupertino firm. However, Apple and HTC are apparently willing to share all but the license fees section, FOSS Patents reports, missing 33 words that detail what exactly HTC is paying.

Those figures have prompted some controversy of late, with HTC CEO Peter Chou angrily rebuking suggestions that they amounted to $6-8 per Android device sold as "outrageous" and inaccurate. Apple argues that Samsung "offers no reason ... why the consideration amount is relevant" to the injunction motion it has against its Korean rival.


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