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April 24, 2013

Can't Catch a Break: Nokia Stalls HTC One Sales over a Microphone

When the HTC One was announced, we were hugely impressed. HTC's high-end phone is clearly a class act, and we hope that it goes on to become a success with the public. The industry needs for HTC to be successful, and the HTC One will prove pivotal to that goal. But the HTC One won't be able to accomplish any such thing if HTC can't get it into the market!

Last month, shipments of HTC's flagship smartphone were delayed because of parts shortages - most notable for a shortage of camera parts. This week brings additional bad news: Nokia has disassembled the HTC One and discovered that the device uses an interesting microphone - one based on technology that Nokia happens to own a patent on, and for which apparently neither HTC nor its parts partner and supplier, STMicroelectronics, have a license for from Nokia allowing them to use the technology in the HTC One.

Interestingly, the patent exists in the United States but is still listed as a pending application in Amsterdam and for Europe.

In the meantime, Nokia isn't merely stating the discovery. On Monday, the company received a preliminary injunction against STMicroelectronics from an Amsterdam District Court (aka Rechtbank Amsterdam) that effectively shuts down the sale of the microphone as it is currently configured for use inside the HTC One. As manufactured by STMicro for the HTC One, the "dual membrane HDR microphone" uses components ostensibly invented by Nokia and that Nokia claims were made exclusively for use in Nokia smartphones.

Nokia and STMicro apparently have a deal that prevents STMicro from selling the microphone to anyone other than Nokia, and the deal supposedly runs through to March 2014 - the same date that has been set for when the preliminary injunction ends. The injunction, which isn't based on patent issues but rather on the issue of the Nokia-STMicro exclusivity arrangement, appears to be limited to sales in the Netherlands.

Florian Mueller, our favorite go-to person for all things dealing with mobile technology patents, points out an interesting issue: "Actually, a court-determined breach of such a contract is infinitely more problematic conduct on STMicro's part than an act of incidental patent infringement would constitute. Whether HTC had knowledge of the circumstances under which STMicro supplied those microphones is unknown. It may or may not have been a good-faith purchaser, and maybe this will be clarified in some other litigation at some point."

Regardless of the underlying issues, HTC is left with the unfortunate problem of having to find another source for its microphones if it wants to sell the HTC One in the Netherlands. We feel bad for HTC on this. It is unfortunate, but we hope the company will be able to pull together an alternative strategy so that it can put the HTC One into play there as soon as possible.

Edited by Alisen Downey

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