The patent agreement Apple and HTC signed last week contains a special clause that will invalidate the deal if either company is acquired by another firm. The agreement prevents another company, such as Samsung (005930), from purchasing HTC (2498) to end its own patent battle with the iPhone maker, Florian Mueller of FOSS Patents reports.
“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 in which the original company is left with less than 50% of the voting power, or where the original company is merged with a third-party. The licensing agreement can be transferred to an acquiring company, however, if both Apple (AAPL) and HTC grant the company with special permission.