S3 Graphics loses a patent fight with Apple

Monday's decision by the US ITC is a setback for HTC, which bought S3 amid its own patent fight with Apple

The U.S. International Trade Commission has determined that Apple did not infringe technology patents owned by S3 Graphics and ended its investigation of the matter, the ITC announced Monday.

The decision is a setback for handset maker HTC, which recently acquired S3 and is fighting its own patent battles with Apple at the ITC and elsewhere.

S3 filed its complaint in May last year, accusing Apple of infringing four of its patents related to image rendering. In July, an administrative law judge issued an initial decision that sided with S3 on two of those patents.

Monday's decision overturned that finding, however.

"Having examined the record of this investigation, including the [administrative law judge's initial decision] and the submissions of the parties and non-parties, the Commission has determined to reverse the [administrative law judge's] finding of a violation of section 337 and find no violation," the ITC said.

HTC announced its plan to buy S3 for $300 million in July, just after the ITC's initial decision came out. It was seen as a way for HTC to strengthen its patent arsenal against Apple and other rivals.

"We are disappointed, but respect the ITC's decision," HTC said in a statement Monday. "While the outcome is not what we hoped for, we will review the ruling once the commission provides it and will then consider all options, including appeal."

It's not the end of the matter for another reason, too: In September, S3 filed a separate complaint with the ITC, accusing Apple of violating a different set of patents.

Apple, meanwhile, has filed its own complaints against HTC, at the ITC and in U.S. federal courts.

In a twist, Advanced Micro Devices filed a motion in September to intervene in the case that was just terminated, claiming the patents asserted by S3 actually belong to AMD. The ITC denied AMD's motion to intervene, but it allowed AMD to file a further motion in the case.

The ITC is a U.S. federal agency set up to investigate trade issues and provide advice to the president and U.S. lawmakers.

James Niccolai covers data centers and general technology news for IDG News Service. Follow James on Twitter at @jniccolai. James's e-mail address is james_niccolai@idg.com

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