November 29, 2011 / 5:59 PM / 8 years ago

Pressure grows on HTC to settle dispute in Germany

STUTTGART (Reuters) - Pressure grew on smartphone maker HTC to settle a long-running legal battle in Germany after a court spokeswoman said on Tuesday local patent firm IPCom can enforce an injunction against the Taiwanese firm’s sales in Germany.

The injunction would stop all of HTC phone sales in Germany.

A Mannheim court ruled in February 2009 against HTC in a patent fight with IPCom, allowing an injunction against sales of HTC phones using UMTS technology, and setting a penalty of up to 250,000 euros ($333,000) each time the injunction was contravened.

HTC, all of whose smartphones use UMTS technology, withdrew its appeal against the 2009 decision last week, making the original decision enforceable.

After the 2009 ruling HTC said the injunction would stop it from selling and importing its mobile devices into Germany, but now it says the injunction covers only one HTC handset, which is no longer sold in Germany.

“The text of the injunction is crystal clear. The ruling itself doesn’t mention any particular device — only the reasoning does,” said Florian Mueller, German patent expert and blogger.

IPCom on Monday asked HTC to stop sales and distribution of all its smartphones in Germany, but the Taiwanese firm said on Tuesday it continued to sell them.

Germany is a key market for HTC who sells around 2 million smartphones a year there, with monthly sales at 190,000 last quarter, according to research firm IDC.

“HTC can try to delay the inevitable but a settlement would make most sense now,” Mueller said.

IPCom has licensed its patents to several key players of the mobile phone industry.

IPCom is also fighting Nokia over usage of patents IPCom acquired from Bosch. Bosch created the portfolio between the mid-1980s and 2000, and it includes some of the key patents in the wireless industry, such as patent 100, which standardizes a cellphone’s first connection to a network.

Partly due to legal challenges investors have started to lose faith in HTC, fearing it cannot regain the innovative streak that catapulted it from an obscure contract maker to the world’s No.4 smartphone brand. Its shares have dropped around 30 percent in two weeks.

HTC’s Desire, Sensation and Wildfire models have lost ground to Apple Inc’s iPhones and Samsung Electronics’ Galaxy line-up, prompting calls for a change of tack in a fast-moving and fickle market.

Reporting by Hendrick Sackmann and Tarmo Virki; Editing by Jon Loades-Carter

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