The Apple-HTC settlement which was announced by both companies earlier this month will become invalid if either of the parties involved gets acquired by another party, a report claims.
First noticed by Florian Mueller of Foss Patents, the agreement is said to feature a clause that nullifies the Apple-HTC settlement if another firm buys out either Apple or HTC.
Mueller writes that the agreement contains the following clause:
"In the event of a Change of Control of a party, this Agreement shall automatically terminate unless otherwise agreed in writing by the Parties, effective immediately prior to such Change of Control."
The Apple-HTC settlement defines Change of Control as:
"'Change of Control' of a Person means any of the following occurring after the Effective Date in which the beneficial owners of securities representing the right to exercise voting power with respect to the election of directors or similar managing authority of such Person immediately prior to the respective transaction or series of related transactions do not, immediately after the consummation of the respective transaction of series of related transactions, beneficially own more than fifty percent (50%) of the voting power of the surviving or resulting entity (or direct or indirect parent of the surviving or resulting entity) with respect to the election of directors or similar managing authority: (a) any Third Party or group (within the meaning of Sections 13(d)(3) or 14(d) (2) of the Securities Exchange Act of 1934) of Third Parties (other than such Person, any trustee or other fiduciary holding securities under any employee benefit plan of such Person, or any company owned, directly or indirectly, by the stockholders of such Person in substantially the same proportions as their ownership of the common stock of such Person) becomes the beneficial owner, directly or indirectly, of securities of such Person representing more than fifty percent (50%) of the voting power of such Person's then outstanding securities entitled to vote generally in the election of directors; or (b) the consummation by such Person of a merger or consolidation with any other Third Party or group of Third Parties. As used in this Agreement, a 'Change of Control of a Party' means a Change of Control of HTC CORPORATION or APPLE INC. (or any Parent Holding Company under Section 9.6)."
This clause prevents, for example, Samsung from buying HTC and using the Apple-HTC settlement to end all legal battles with the iPhone maker.
Not that Samsung is interested in doing that as the company has said it will not follow HTC's lead in inking a deal with Apple.
In fact, Samsung is asking for the details of the Apple-HTC settlement and is just waiting for it as a judge has ordered Apple to give Samsung its agreement with HTC.
Samsung is looking to use the terms in the Apple-HTC settlement to further its case that Apple has not been devastated that much by alleged infringements.
Furthermore, if Apple is willing to license their patents, it shows that these patents are not too essential to the uniqueness of Apple products.
The Apple-HTC settlement was announced earlier this month resulting in a dropping of all legal battles between the two companies and a cross-licensing deal between the companies and their patent portfolios.
READ:
HTC and Apple Settle Patent Dispute with Licensing Agreement
Samsung Will Not Follow HTC's Decision To Negotiate With Apple
Samsung Looks To Apple-HTC Settlement For Help In Apple War
HTC CEO Calls Per-Handset Price Estimates After Apple Settlement 'Outrageous'
Judge Orders Apple To Detail HTC Settlement Terms To Samsung
Images from izensun on Flickr (CC)
About Solon Harmony Dolor
A passion for technology and journalism makes this upcoming writer very interested in social media and technology news. Fresh from finishing an English and Journalism degree from the University of the Philippines Diliman, he aims to bring interesting news to our readers .
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