HTC will soon complete its acquisition of S3 Graphics, a purchase it confirmed will boost its patent portfolio and help defend the company from future lawsuits, Focus Taiwan reported on Tuesday. Grace Lei, HTC’s general counsel, said the company valued S3′s patents because in 2011 the U.S. International Trade Commission had found that Apple was in violation of various S3 patents, although the ruling was later overturned. “We think S3′s patent portfolio is valid and strong, and we have decided to complete the purchase of S3 after cautious assessment,” Lei said at the company’s annual shareholders’ meeting, adding that S3 owns about 270 patents, some of which are licensed to Sony, Nintendo and Microsoft. The Taiwanese smartphone vendor has been embroiled in a patent battle with Apple over alleged infringements found in its Android handsets. The iPhone-maker has successfully delayed shipments of the company’s flagship One X smartphone, however HTC insist its technology does not infringe upon Apple’s patents. More →
Leading smartphone vendor HTC on Wednesday trimmed its fourth-quarter revenue forecast by roughly 23% as stiff competition from Samsung and Apple has seeming slowed sales. The Taiwan-based company became the No.1 smartphone vendor in the U.S. by shipment volume last quarter, but a six-month string of record revenue came to an end in October following the release of Apple’s highly anticipated iPhone 4S. In light of the new iPhone and Samsung’s recent success in the smartphone space, HTC lowered its fourth-quarter revenue forecast to NT$104 billion from its earlier guidance of between NT$125 billion and NT$135 billion. Unless things pick up, HTC’s sales will decline sequentially for the first time in two years, Bloomberg reports. HTC said it will also reevaluate its $300 million acquisition of S3 Graphics following news that it lost a patent-infringement case against Apple earlier this week. More →
The United States International Trade Commission has dismissed a lawsuit in which S3 Graphics, which HTC plans to acquire for $300 million, accused Apple of infringing on its patents. Originally, Apple was found guilty of infringing on technology owned by S3 Graphics because it used the “DXT” image format on several of its its computers. “On September 15, 2011, non-parties Advanced Micro Devices, Inc. (“AMD”) and its subsidiaries ATI Technologies ULC and ATI International SRL filed a motion to intervene and terminate the investigation based on a claim that AMD owns the patents at issue and declines to assert them in this investigation,” James R. Holbein, Secretary to the Commission explained in an official letter Monday. Apple subsequently filed its own motion to terminate the investigation and the Commission decided to extend the completion date for its overall investigation until November 21st. “Having examined the record of this investigation, including the ALJ’s final ID and the submissions of the parties and non-parties, the Commission has determined to reverse the ALJ’s finding of a violation of section 337 and find no violation,” Holbein said. More →
HTC will appeal the U.S. International Trade Commission’s ruling that it is infringing on two of Apple’s patents. “Now the course of action is to appeal, we believe we have a very strong case, the attorney agrees with us, and therefore we will appeal,” HTC’s chief financial officer Winston Yung told The Wall Street Journal on Monday. On Friday, a U.S. ITC judge said that HTC was guilty of infringing on two of Apple’s patents that cover a “system and method for performing an action on a structure in computer-generated data,” and a “real-time signal processing system for serially transmitted data.” Apple originally filed the complaint last year, and HTC has filed its own lawsuit against Apple in which it argues that Apple is infringing on patents owned by its subsidiary S3 Graphics. Yung also said that HTC is open to discussing the lawsuit with Apple. “If the parties want to talk, we can talk anytime…I think in cases like this, you should keep in touch,” he said.
On Wednesday, VIA Technologies and WTI announced that the two have reached an agreement to sell holdings in S3 Graphics to HTC for $300 million. S3 Graphics builds hardware graphics solutions for a number of consumer devices including game consoles, PCs, and mobile devices. VIA will receive $147 million from the deal while WTI will take home $153 million. “The transaction would allow VIA to monetize a portion of its rich IP portfolio, yet retain its graphics capabilities to support the development and sale of its processors and chipsets,” said Tzu-mu Lin, Senior Vice President and Board Director of VIA. The deal is still subject to regulatory approval but is expected to close before the end of this year. Read on for the full press release.