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Apple-HTC licensing deal to auto-terminate if any party is bought out

post #1 of 14
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A heavily redacted public version of the Apple and HTC licensing agreement was discovered on Wednesday, offering a few shreds of information regarding the ten-year deal including a "change of control" clause that automatically terminates the agreement if one of the parties is bought out.

Apple-HTC Agreement
Header of the unredacted Apple-HTC licensing deal. | Source: FOSS Patents


The discovery was made by FOSS Patents' Florian Mueller, who said he found the document "in a place where few people look for this kind of information," with the "change of control" stipulation holding that patent licensing deals from any of the companies involved in the agreement will be terminated unless otherwise specified. When HTC entered into the deal, it brought with it subsidiaries S3 Graphics and VIA technologies, both of which were asserting claims against Apple.

Mueller noted that change of control clauses are not unusual in such situations, however they are not always automatic, as is the case of the Apple and HTC deal.

According to the filing, the U.S. dismissals of existing litigation are without prejudice, meaning that the parties can possibly reassert their claims if the arrangement goes sour, or one of the companies is purchased. Due to Apple's dominant market position, it is unlikely to be bought out anytime in the near future, so the clause clearly skews toward protection against a possible takeover of HTC or one of its subsidiaries. Under the deal, such a move would not be beneficial to the new owner as Apple is theoretically able to reassert claims.

Other details unearthed from the document revealed that "certain" patents are deemed "covered," meaning that if such properties were licensed to third parties, they would remain encumbered if the agreement were to be terminated. The redacted version does not clarify what the patents are, or what "covered" truly means regarding patent rights, however Mueller believes that the definition is very inclusive.

While the 30-page document shines some light on the closely guarded licensing deal, more information may be revealed if Samsung is granted its motion to compel Apple to provide an unredacted version. The move is part of post-trial proceedings in the landmark Apple v. Samsung case, with Korean company looking to sway the court's decision to ban certain products by citing specifics in the Apple-HTC deal.
post #2 of 14
That's a good clause to have from Apple's perspective because it will keep Samsung or Google from buying HTC and getting access to Apple's IP. Apple is too big to get bought out.
post #3 of 14
So if Samsung were to buy HTC, if couldn't benefit from this deal with Apple.
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post #4 of 14
Well we know Apple won't be that `party' to be bought out. This is the reason Samsung was inquiring. They want that cross-licensing deal of HTC.
post #5 of 14
Why would anyone want to buy HTC which is fading quickly? They don't even bother to buy Nokia or RIM.
Lenovo, Huawei and ZTE are rapidly taking market share away from Samsung and HTC. They don't need HTC at all.
post #6 of 14
Hostile takeover of HTC: Samsung or Google?

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post #7 of 14
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Originally Posted by drblank View Post

That's a good clause to have from Apple's perspective because it will keep Samsung or Google from buying HTC and getting access to Apple's IP. Apple is too big to get bought out.

Or, if there are patents that HTC has that they think Apple will need they can quash it by buying them out. Unfortunately it works both ways and chances are Apple is benefiting a lot more from this deal than HTC is.

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post #8 of 14
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Originally Posted by peter236 View Post

Why would anyone want to buy HTC which is fading quickly? .


c/HTC/Motorola

Motorola was going nowhere until Google bought them, too. They were purchased at least partly for IP (as well as a few billion dollars in losses that were carried forward).

If the Apple/HTC license were transferrable, that could easily be worth more than the rest of HTC.
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post #9 of 14
Is this really news? From what I know, change of control clauses are fairly common in these sorts of agreements.
post #10 of 14
Quote:
Originally Posted by anantksundaram View Post

Is this really news? From what I know, change of control clauses are fairly common in these sorts of agreements.

Are you kidding? This is huge!

This is the first hint of any kind that Apple might be bought out. Wonder who the buyer might be. Can the entire continent of Europe afford Apple?

Wow! Wow!
post #11 of 14
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Originally Posted by ankleskater View Post

Are you kidding? This is huge!
This is the first hint of any kind that Apple might be bought out. Wonder who the buyer might be. Can the entire continent of Europe afford Apple?
Wow! Wow!

Tell me you're pulling our turkey legs.

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post #12 of 14
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Originally Posted by SolipsismX View Post


Or, if there are patents that HTC has that they think Apple will need they can quash it by buying them out. Unfortunately it works both ways and chances are Apple is benefiting a lot more from this deal than HTC is.

 

Actually HTC stands to gain quite a bit more.  Now they can add features without worrying about litigation, and enter the US market freely.  Their stock price gains since the agreement show that most investors do indeed believe they got a good deal.  Couple this with them releasing the first 1080p smartphone on the public (which is now available BTW), and it should be a very good Christmas for HTC owners and investors.  

post #13 of 14
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Originally Posted by Mikeb85 View Post

 

Actually HTC stands to gain quite a bit more.  Now they can add features without worrying about litigation, and enter the US market freely.  Their stock price gains since the agreement show that most investors do indeed believe they got a good deal.  Couple this with them releasing the first 1080p smartphone on the public (which is now available BTW), and it should be a very good Christmas for HTC owners and investors.  

They have to pay for each phone sold...

 

And do you truly believe that they can use Apple's patents? no way.

post #14 of 14
Quote:
Originally Posted by pedromartins View Post

They have to pay for each phone sold...

 

And do you truly believe that they can use Apple's patents? no way.

And they also pay Microsoft for each phone sold.  Peace of mind and stability is worth money.  Apple also pays Nokia, Samsung pays Microsoft, etc...

 

The fact that HTC won't get sued by Microsoft, Apple, or Google - that their shipments will never be blocked, that none of their products will face import restrictions, etc..., is definitely worth a dollar amount per phone.  HTC's stock is up this evening BTW, and is up since the Apple announcement.  If the agreement was so bad for them, wouldn't investors be jumping ship?  

 

I don't know if they can use Apple's 'patents'.  I know they still have multi-touch, and other features that Apple tried to sue others for...  I know they still sell 'candy bar' phones, and it's not like they ever copied Apple's 'look and feel' anyway.  I don't know to what extent Apple compromised (because they did compromise from Steve Jobs' position).

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