SAN JOSE, Calif. – Apple's deal to license smartphpone patents to Taiwan's HTC does not necessarily indicate it is ready to end disputes with larger Android rivals Google, Motorola and Samsung, according to two experts.
Apple announced on Nov. 10 it reached “a global settlement that includes the dismissal of all current lawsuits and a ten-year license agreement” with HTC, although it declined to provide details of the deal. Apple sued HTC for patent infringement on March 2, 2010, firing the first shot in a mobile patent war that eventually grew to more than 100 lawsuits and countersuits.
The deal marks a shift in Apple’s legal strategy toward licensing rather than litigation. Observers said it bears the thumbprint of Apple CEO Tim Cook, who has expressed publicly his aversion to lawsuits. The move marks a policy shift from Apple co-founder Steve Jobs who vowed to “go thermonuclear” against Android backers he claimed “ripped off the iPhone.”
Reports estimate Apple could be charging HTC about $7 per handset and could net as much as $280 million annually from the deal.
But two experts who closely follow the two-and-a-half year mobile patent wars remain skeptical Apple will strike similar licensing deals with larger rivals. They note HTC has declined significantly in market share recently and has been more open to licensing, agreeing to a similar deal with Microsoft.
“I think the settlement is a good first step towards winding down the smartphone wars, but it is only a first step…that settlement may replace litigation eventually,” said Mark Lemley, a professor at Stanford Law School.
“HTC is a small player, and it had its own patent suits against Apple,” said Lemley in an email exchange. “So Apple has more reason to keep going after Samsung and Motorola than HTC,” he added.
Indeed, Apple won a landmark $1.05 billion in August when a San Jose jury decided a wide array of Samsung handsets infringed Apple’s design and utility patents.
"If Apple strikes more license deals with Android device makers in the near future, then--and only then--it will be safe to assume that Apple is more licensing-oriented than it was under Jobs," said Florian Mueller, a bloggerwho closely follows the mobile patent fights.
"HTC has over time become less and less of a threat to Apple, so there was a particularly strong incentive for Apple to do away with what was basically a distraction," Mueller said in an email exchange.
Google bought Motorola in August 2011 for $12.5 billion, its biggest acquisition ever, largely for its cache of 17,000 patents. The Apple/HTC deal suggests the merger did not yield Google enough ammunition to protect OEM users of Android.
“If HTC had believed that Google could solve Android's patent problems with Motorola's patents, it wouldn't have done a separate deal with Apple but would have waited for a global settlement between Apple and the entire Google-led Android ecosystem,” Mueller wrote in his blog.
Several reports said chief executives of Apple and Google have been in talks about mobile patent litigation. “This pact is unambiguously a de-escalation of Apple’s proxy-war against Google…setting a baseline for Apple licensing deals,” according to a report in Time Magazine. Related stories: