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License Agreement between Apple and HTC Gets Voided if either Gets Bought Out

November 21, 2012 - Written By Alexander Maxham

Since the Apple and HTC agreement was announced, people have been speculating that HTC might be getting bought out by Apple soon. Which would really help Apple change the look of their iPhone, instead of keeping the same model every year. But in a report from FOSS Patents today, it appears that if HTC or Apple gets bought out by any other manufacturer that the license agreement is then in void. So Samsung will not be able to purchase HTC and end their patent war with Apple with this license agreement.

According to the agreement, there is a clause that states:

“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.”

So how is a “Change of Control” defined? Well it is defined as a transaction in which the original company is left with less than half (50%) of the voting power, or where the original company (HTC or Apple) is merged with a third-party. So it appears that Samsung could buy HTC for 40% and the agreement would still be intact. But it’s unlikely that’ll happen. The license agreement also states that the agreement can be transferred to an acquiring company, if and only if, both Apple and HTC grant the company with special permission to have the agreement transferred.

So it’s not to hard to understand some of the terms and conditions of this agreement. Although it is kind of confusing, to say the least. But it is nice to actually see some of the details of this licensing agreement start to come to light now. Especially after Samsung asked the Judge this week to have Apple fork over the details of this agreement. Perhaps Samsung might be going after something similar with Apple? We’ll have to wait and see.

It’s been reported before that HTC is paying Apple $6-8 per handset sold, HTC has denied that. So how much do you think HTC is paying Apple to use their standard-essential patents? Let us know in the comments what you think.