HTC open to 'fair' Apple patent settlement

HTC has indicated that it is willing to negotiate a settlement with Apple over the software patent-related spat between the two companies, which has seen partial preliminary victories for both parties.

Both of those US International Trade Commission (ITC) initial rulings, if formally upheld by the ITC later this year, could result in the companies being unable to sell their biggest products — Android smartphones in the case of HTC, and almost all of Apple's desktop, notebook and handheld device lines — in the US.

In an interview with Bloomberg on Tuesday, HTC chief financial officer Winston Yung said his company and Apple "have to sit down and figure it out", and HTC was "open to all sorts of solutions, as long as the solution and the terms are fair and reasonable".

Yung noted that the companies had already been having on-and-off discussions around their patent war, but he did not known of any formal talks taking place since the two ITC initial rulings came out earlier this month.

The war began in March 2010, when Apple sued HTC, saying its Android smartphones infringed on 10 Apple patents. On 15 July, an ITC administrative law judge said HTC was indeed in violation of two of those patents, relating to Android's 'Linkify' function and to its signal processing system. That decision could be upheld by the ITC in December.

Following the original Apple suit, HTC countersued in May last year. However, the preliminary victory it has gained did not come from that suit — on which no ruling has yet been made — but instead from a company it bought earlier this month, largely for its intellectual property portfolio.

S3 Graphics, a graphics visualisation company partly owned by chip firm Via Technologies, had been in its own legal battle with Apple since May 2010, when it complained to the ITC that the Mac-maker was infringing on four S3 patents with its iMac, MacBook, iPhone, iPod Touch and iPad products.

On 1 July, another ITC administrative law judge agreed that Apple was infringing on two of the four S3 patents — both relating to image compression — in those products.

Days after that initial ruling, HTC snapped up S3 for $300m (£187m). In December, an ITC panel will decide whether or not to uphold the judge's preliminary decision.

The ITC, which is supposed to be a trade adviser to the US government, is increasingly being used as a battleground by big companies engaging in patent skirmishes, partly because it has the power to stop companies importing products from their overseas manufacturing bases.

However, software-patent-related spats between companies of the stature of Apple and HTC tend to result in licensing agreements rather than outright product bans.

Some lobbyists in the UK want software patents introduced here, where they are for the most part not allowed. However, the recent Hargreaves report into intellectual property reform has urged governmental resistance against such a change, saying it would allow 'patent thickets' — complex webs of patents that, it has been argued, stunt innovation — to form here.

The government, which was supposed to give its formal response to the report by the summer parliamentary recess, is yet to do so.