Apple, HTC Enter Into 10-Year Cross-Licensing Deal, Exit All Patent Litigation

Apple Inc. (Nasdaq: AAPL) and the HTC Corp. (Taiwan: 2498) jointly announced this weekend a global settlement that encompasses the beginning of a 10-year cross-licensing agreement and the end of all current lawsuits between the companies.

The cross-licensing deal covers both present and future patents owned by Apple, based in Cupertino, Calif., and HTC, headquartered in Taipei, Taiwan.

The terms of the global settlement are private, the publicly traded companies said.

The leader of each company expressed satisfaction with the settlement because it would allow the organization to focus more on innovation and less on litigation.

“We are glad to have reached a settlement with HTC,” said Apple CEO Timothy D. Cook. “We will continue to stay laser focused on product innovation.”

“HTC is pleased to have resolved its dispute with Apple, so HTC can focus on innovation instead of litigation,” said HTC CEO Peter Chou.

The Apple-HTC battle was one of the first major frays in the global smartphone patent war, with the opening salvo fired in 2010, when the American company sued the Taiwanese company over alleged infringement centered on the iPhone, as noted by Reuters.

On another battlefront in this patent war, Apple scored a stunning victory over Samsung Electronics Co. Ltd. (Korea: 005930) in August when a nine-member jury in California decided for the former and against the latter -- to the tune of $1.05 billion -- on six of seven patent-infringement claims centered on mobile devices, both smartphones (i.e., the iPhone line) and tablets (i.e., the iPad line).

Speaking of the Apple-HTC settlement announced this weekend, Daniel Chang, an analyst who covers HTC at Macquarie Group Ltd. in Taipei, was quoted by Bloomberg News as saying: “This is definitely a positive surprise for HTC. The shares will probably get a bump on this news, though it doesn’t solve the structural problems at the company.”

Between New Year's Day and Friday, Apple's share price rose 36.27 percent, from $401.44 to $547.06, while HTC's share price fell 50.54 percent, from $15.75 (456.94 New Taiwan dollars, or TWD) to $7.79 (226.00 TWD).