HTC, Qualcomm Race To Prevent U.S. Ban on Phones
Taiwan-based HTC is trying to avoid repercussions of a U.S. ban on its smartphones, following Finnish rival Nokia's preliminary court win in a patent case. HTC's next move will be to work with Qualcomm on ways to alter a component for its flagship HTC One phone and other devices, according to a Wednesday report in The Wall Street Journal. Qualcomm provides the chipsets and modems for the HTC One.
The Journal report said the on the HTC-Qualcomm workaround was based on "people familiar with the matter." The U.S. International Trade Commission (ITC) ruling, which was made on September 23, did not mention the HTC One among the HTC older models affected but the HTC One smartphone and other new devices use the same technology.
Come January, when the ITC decides whether to uphold the September ruling or not, any ban on the HTC One would not help smartphone maker HTC, trying to recover from disappointing and competition. If the device maker were not to change the designs and if the ITC were to hand another victory to Nokia in January, a number of HTC models could be hit with import bans.
The September ruling from the ITC said that HTC infringed on two Nokia patents dealing with enhanced transmission and reception for calls.
One of the two patents in the ruling describes a "method for attenuating spurious signals and receiver," and the other patent describes a "method and arrangement for transmitting and receiving RF signals through various radio interfaces of communication systems."
The ITC ruling in September was a preliminary ruling. The ITC is expected to reach a full decision in late January 2014. The U.S. International Trade Commission is an American body that determines the impact of imports on U.S. industries, and directs actions against unfair trade practices, such as patent infringements. Mind the word preliminary: HTC still has time before the January final ruling to develop a technical workaround.
To be sure, HTC does not need the repercussions in losing out on patent wars. Nokia, for one, has been an active player in protecting its over 10,000 patents against what it considered violations. According to reports, Nokia has made numerous filings in courts around the world in recent years, including targeting HTC in courts in Europe.
HTC's reaction to its most current challenge appears to bear out the Journal story that it would prefer a workaround to the risk of a product ban.
The Taiwan-based smartphone maker said in a statement after the ruling that it "will keep its alternative plans ready to ensure no business disruption."
HTC has good reason to avoid any ban here. Barclays analyst Dale Gai told the Journal that the U.S. market is important for HTC. "Although its largest market has recently shifted to Asia, the U.S. still makes up about 20% of sales."