Patents case lost, S3 less appealing to HTC

Patents behind HTC's interest in S3 Graphics? Taiwan's HTC reevaluating its purchase of S3 after it lost its patents suit against Apple.

Pichi Chuang/Reuters
A shop attendant arranges HTC phones in a mobile phone store in Taipei last week. Taiwan's HTC Corp, the world's No.4 smartphone maker, is reconsidering its purchase of S3 Graphics, after the latter lost its patents suit against Apple.

This isn’t a good week for S3 Graphics. After S3 had its patent dispute against Apple dismissed by the U.S. International Trade Commission earlier this week, the company’s suitor HTC is now having second thoughts about its union.

HTC said that it will “reevaluate” the $300 million S3 purchase,Bloomberg reports — a move that makes clear what the Taiwanese phone maker’s main interest in the company was, and shows just how quickly fortunes can shift in the dirty business of patent litigation.

S3 won a patent ruling against Apple back in July, which centered on the use of image compression technology in Mac OSX. Shortly after that, HTC, which itself is in the midst of battles over patent battles with Apple, announced its intention to purchase the company. But on Monday, the ITC reversed S3′s July ruling and dismissed the case, which means HTC can no longer be certain about the superiority of S3′s patents over Apple.

S3 could still appeal the decision, and it also has another ITC case against Apple in the works, but right now it’s clearly not a very appealing purchase for HTC.

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