HTC’s S3 Acquisition Could Ward Off Apple’s Patent Threat

The patent wars just keep getting interesting. As we already know, Apple had filed a lawsuit against HTC regarding infringement of patents held by Apple which relate to the technology used in the iPhone. About 2 weeks back, a U.S. International Trade Commission judge gave an initial ruling in favor of Apple, stating that HTC did infringe upon 2 of Apple’s patents.

We also reported how Apple’s win against HTC could lead to a ban on the import of all Android devices in the U.S. Google obviously knows that, and has asserted that it “will make sure they don’t lose.”

Well, it turns out that HTC may have some leverage after all. On July 6, HTC announced that it had bought S3 Graphics from VIA. At first, the acquisition didn’t make much sense, but then it did. A lot. S3 Graphics had won a ruling in its own patent lawsuit which could lead to a partial ban on the import of Macs, which use chipsets from Intel or AMD, in the U.S.

Now that HTC controls S3, it could use those patents to force Apple to enter into a cross licensing agreement with HTC, thus preventing the ban on its Android devices. It has already stated openly, that it is willing to negotiate with Apple on the issue. It’s not yet clear if HTC could use the S3 patents to get a ban on the import of Macs, but it seems highly likely. Apple has already challenged the validity of S3’s patents at the U.S Patent Office. We should know the results of the patent reexamination process soon.

This could turn out to be the smartest acquisition HTC ever made.

Published by