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HTC to appeal US ruling over Apple patent infringement

Taiwan-based HTC Corp., now the world's fifth-largest maker of smart phones, said yesterday that it would appeal an initial ruling made by the U.S. International Trade Commission (ITC) that it has infringed two of 10 patents held by U.S. giant Apple Inc. concerning portable electronic devices.

HTC made the remarks in a statement issued yesterday after receiving a notice of the ITC judge's initial ruling on the lawsuit, which was filed in March 2010 by Apple accusing the Taiwanese firm of violating 10 patents related to the iPhone.

But HTC also noted that it does not yet have access to the judge's full opinion and analysis to determine the details of his judgment.

A preliminary finding on Friday reportedly said that HTC had violated two of the patents. HTC maintains none of the ten were infringed.

Grace Lei, general counsel of HTC, said in the statement that HTC is highly confident that it has a strong case for the ITC appeals process and is fully prepared to defend the company's interests by using all means possible.

On July 6, HTC announced the acquisition of S3 Graphics Co., Ltd. for US$300 million (NT$8.66 billion) in cash from VIA Technologies Inc. and WTI Investment International Ltd. The company said it expects the deal to strengthen its intellectual property portfolio and bring in benefits for HTC in its patent lawsuit with Apple.

In fact, the ITC has already ruled in a separate case that Apple infringed on patents held by HTC subsidiary S3 Graphics, and the final ruling on the case is expected to be announced in November this year.

As the legal battle between the rivals escalated, Apple filed a new complaint against HTC with the ITC on July 11, claiming that HTC was infringing on another five of its patents involving software architecture and user interfaces used in the iPad and iPhone.

HTC touts its own brand of smart phones and also makes handsets for a number of leading U.S. companies, including the Nexus One unveiled by Apple rival Google.

Patent lawsuits are a regular occurrence among technology giants. Apple is currently being sued by Nokia for patent infringement, and has fired back a countersuit against the Finnish mobile phone giant. Last week Apple also hit back at an infringement claim by Samsung, calling for the South Korean company to be investigated.

Market observers said that Apple has lodged patent infringement lawsuits against HTC mainly because HTC has outperformed Apple in smart phone sales in the U.S. market, in addition to the European and Asian markets.

The observers said that HTC took the lead in selling its 4G LTE smart phone model to two major U.S. telecom carriers in 2010, Verizon and AT&T, causing sales of HTC smart phones in the U.S. to keep rising steadily over the past months of the year. They cited statistics as indicating that HTC already sold 6 million smart phones in North America in the second half of the year, higher than the corresponding figure of 5.5 million units recorded by Apple.

Impact on Listed Share Price

On another front, whether the ICT's latest unfavorable initial ruling against HTC will affect the firm's listed share price remains to be seen. Last week, HTC lost its title as No. 1 stock on the local bourse in terms of listed price to Largan Precision, Taiwan's

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 HTC to appeal US ruling over Apple patent infringement 
People stand under an advertisement showing an HTC smart phone in Taipei on April 15. The Taiwanese leading smart phone maker said yesterday it would appeal a ruling by a United States trade body which found it had infringed two patents held by Apple. (AFP)

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