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US affirms validity of HTC unit S3's patents

TAIPEI -- Taiwan's HTC Corp. said Tuesday that the United States Patent and Trademark Office (USPTO) has affirmed the validity of two patents owned by its unit S3 Graphics Co., giving it an edge in its legal war against Apple Inc.

HTC said it has received the re-examination certificate of S3's 146 and 978 patents, which a U.S. trade panel found in an initial ruling last year to have been infringed upon by Apple's Mac computers.

“We are gratified by the USPTO's decision, which proves again that buying the patents from S3 was a significant and correct move for HTC,” the Taoyuan-based smartphone maker said in a statement.

“We will continue to defend our interests and fight actively against any companies that infringe on our rights.”

HTC, which has been locked in other patent battles with Apple, bought S3 for US$300 million in July 2011 to expand its patent portfolio.

“With this certificate, HTC is telling investors that the money it spent on S3 was worth it,” said Herbert Ho, analyst at the Taipei-based Topology Research Institute.

The decision also adds to the “protective umbrella” of patents HTC has built to avoid further lawsuits that could be filed by Apple and other companies against it, Ho said.

Freemont, California-based S3 accused Apple in May 2010 of violating four patents owned by the company.

The U.S. International Trade Commission (USITC) ruled in a preliminary decision in July 2011 that Apple's Mac OS X system had infringed on two texture compression patents of S3 but that the iPhone and iPad had not.

Last November, however, the trade panel overturned the preliminary decision, saying that Apple's Mac OS X system had not infringed on the 146 and 978 patents held by S3.

Following the final ruling, Apple filed re-examination requests to the USPTO against the four S3 patents to try to have them declared invalid.

Decisions on the other two patents are still pending.

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