Apple, HTC sign cross-licensing agreement, end lawsuits

Interesting news in the middle of the night: Apple and HTC have announced they’ve settled all their patent disputes, bringing an end to all running lawsuits between the two companies. The companies signed a ten-year cross-licensing deal. Considering Apple’s legal assault on Android hasn’t been going particularly well, this really shouldn’t come as a surprise.

The two companies sent out a press release during the night to announce the cross-licensing agreement. “HTC and Apple have reached a global settlement that includes the dismissal of all current lawsuits and a ten-year license agreement,” the two state, “The license extends to current and future patents held by both parties. The terms of the settlement are confidential.”

Apple started its legal crusade against HTC well over two years ago, and HTC obviously couldn’t do anything else but reply in the form of countersuits. Since then, the lawsuits have been flying back and forth, but due to Samsung’s meteoric rise in popularity, Apple shifted most of its focus to Samsung instead since it represents more of a threat to Apple’s business than HTC does.

Both companies also added a short statement. “HTC is pleased to have resolved its dispute with Apple, so HTC can focus on innovation instead of litigation,” said Peter Chou, HTC’s CEO. Apple CEO Tim Cook added that “we are glad to have reached a settlement with HTC. We will continue to stay laser focused on product innovation.”

What’s interesting here is that we’re looking at a cross-licensing agreement, and not a mere sack of money going from HTC to Apple. In fact, HTC has told The Verge that HTC “does not expect this license agreement to have any adverse material impact on the financials of the company”, meaning it didn’t cost HTC a whole lot of money. This seems to indicate that the actual cross-licensing was of more import than HTC licensing Apple’s patents; i.e., that HTC’s patents were anything but worthless.

While this licensing agreement may come as a surprise, the fact of the matter is that from Apple’s point of view, it just makes good business sense to start bringing an end to its legal assault on Android. These past few years of patent aggression by Apple have given the Cupertino company little to nothing – the UK, The Netherlands, Germany, Australia; Apple didn’t win anything substantial anywhere, while the lawsuits did tarnish the company’s name. Nobody wants to be known for litigation.

The only potentially meaningful win Apple has scored so far is in the US, but even that win is on shaky ground as judge Lucy Koh has recently agreed to consider Samsung’s evidence of juror misconduct. While the legal outcome might obviously be different – Samsung is really shooting for the stars here – it’s pretty clear to any impartial observer that the jury in this case, especially the foreman, has acted very questionably.

In other words – it looks like to me Apple is settling here because its legal assault simply isn’t going too well. While I applaud the two companies settling, I would’ve much rather seen all this come to a massive clash, with a judge slapping all of these whiny multi-billion dollar crybabies on the wrist for wasting public resources on what are essentially the corporate equivalent of several douchebags comparing penis lengths.


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