Taiwanese handset maker HTC’s lawsuit against Apple over infringement of S3 Graphics’ patents has suffered a fatal blow (in addition to this one) as the United States International Trade Commission (ITC), which can block the import of products, reversed its earlier decision and ruled in favor of Apple on November 21. The Commission has officially ended its investigation of the case and HTC shares fell 4.9 percent on the news.
And now, Bloomberg reports that HTC “will reevaluate” its planned purchase of S3 Graphics following the ITC ruling.
HTC Corp. will reevaluate its planned purchase of S3 Graphics Co. after the target company lost a U.S. International Trade Commission ruling it brought against Apple Inc. over patent infringement, the Taoyuan, Taiwan-based company said in a statement today.
Just yesterday, HTC’s general counsel Grace Lei told DigiTimes yesterday his company “will consider an appeal”. But after closer inspection of the ITC ruling, the company clearly concluded the best course of action is to consider dropping the $300 million acquisition of graphics maker S3 Graphics announced back in June, which only proves this acquisition may have been planned as a leverage in HTC’s other legal dealings with the iPhone maker.
HTC’s planned acquisition of S3 Graphics from VIA Technologies was their backup plan as much as their lawsuit based on Google’s patents. For FOSSPatents‘ Florian Mueller, this equals to “a setback for HTC, which is in the process of acquiring S3 Graphics and was hoping to gain leverage against Apple”. Mueller writes this is now “the best possible outcome for Apple”. Of course ITC’s ruling won’t prevent HTC from selling its popular handsets in the United States. As for Apple, it is cleared of violating HTC patents.
Both VIA and HTC share the same owner, Formosa Plastics Group, a Taiwanese conglomerate whose diverse interests include biotechnology, petrochemical processing and production of electronics components. The entity is owned by the Wang family. The wife of VIA Technologies’ CEO is Ms. Cher Wang, chairperson and co-founder of HTC. In July, VIA Technologies, the original owner of S3 Graphics, won a lawsuit against Apple over infringement of two of S3 Graphics’ patents in Mac products. The official statement HTC provided to Bloomberg today strongly indicates the Wangs are reconsidering the planned transfer of ownership of S3 Graphics from VIA Technologies to HTC. According to CNBC, Formosa Plastics Group’s estimated net worth is $8.6 billion, but other sources point out that this sum covers only net worth of Cher and her husband alone while the whole conglomerate could be valued at as much as $17 billion.