Existing phones using the components face no sales ban

The full details have emerged about yesterday's actions in the Netherlands, where a court was said to have handed down a preliminary injunction against the HTC One on behalf of Nokia. According to the district court filing, the courts have imposed a 10-month ban on ST Microelectronics selling any of the dual-membrane microphone pieces that were designed and co-developed by Nokia. Apparently, some miscommunication led ST Micro to believe that the exclusivity agreement for Nokia was only six months, when it was actually 12. As a penalty the terms were extended a further six months, during which time ST Micro is not allowed to sell the parts to anyone other than Nokia. 

We don't make this up, we just report it.

The courts found HTC "blameless", as they could not know the details of a confidential agreement between Nokia and ST Micro, and they face no penalties. Nor are their products banned in the Netherlands or anywhere else. They will not be allowed to source the components from ST Micro for six months, though -- which could easily lead to supply issues and expensive re-engineering for future HTC One shipments. HTC has issued a statement saying in part that they "do not expect this decision to have any immediate impact on our handset sales." But they certainly can't be happy. 

Source: All About Phones (Dutch); via: Engadget


Reader comments

Dutch courts find HTC 'blameless' in Nokia's microphone dispute, but sales of offending parts halted for six months


On the contrary, I think HTC will be VERY happy with this development. First, they were held blameless. Second, they can continue to sell product. Third, since they might suffer financially if the are not able to meet production (due to the extra six-month waiting period), they could conceivably go after this company for damages. This would not be substantially different than some of the airlines who will definitely be asking Boeing for money to compensate them for losses due to the grounded 787 fleet.

Personally, I think HTC could not have asked for a better result.

HTC could even make a deal with Nokia to source the parts from Nokia in the interim so they don't have to redesign the microphone during the supply shortage term.

It's a tricky business to sue your single source supplier. It's like perform surgery on yourself alone. You might kill yourself before anything is fixed.

Apparently ST owns the pattens. Nokia just has timed exclusive right of a specific design which duration of that exclusivity is in dispute.

Worst case, ST can re-design and re-engineer another microphone with different dimension. This might take a few weeks before it goes into volume production. HTC would have to re-design their sound filters to apply to new microphone.

Nokia just want to assault HTC, there is '0' chance of Nokia allowing HTC useing this microphone before exclusivity ends.

If HTC can not make a deal with Nokia to use the part, I hope they can find a comparable alternative from another vendor. I really want HTC to succeed. I'm very happy with my new HTC One.

This is another nail in HTCs coffin. Sure there are ways HTC could have found out, but really this is just another in a long line of F ups by the head of HTC. They constantly choose 1 carrier for their "flagship" devices. Which is it now? The DNA? The One, One S,One X, One etc?? Who knows, surely not HTC. HTC is fighting a losing battle, I expect them to get serious offers by Sammy or Nokia within 2 years. HTC is floundering and this 6 month delay will not help. HTC is screwed. On a pleasant note looks like The S4 will sell 20 million in the first 20 days!

You must be one of those little kids that Samsung pays to badmouth other companies. Looks like you've earned your $.37 today.

The only way HTC could of found out was if ST Micro told them.

Also, HTC didn't 'choose' to release different flagship phones for different carriers. It is the other way round. US carriers (especially Verizon) want exclusive phones, so they force HTC to sign up to these exclusive deals.

Man I hope HTC solves this problem. Although I don't have the One, it looks like a great device. I'm rooting for them this year

Where are the people who insisted yesterday that HTC HAD to know? Anyone? Please, tell us again how buying a part from a supplier gives you access to the contents of confidentiality agreements. Bueller? Bueller?

You missed the point. If they didn't know (which I suspect someone at HTC did) they should have known. Piss poor product development on HTC's part. But what else is new, one boondoggle after another. Anyone who would buy a phone from this mickey mouse company gets what they deserve.

No, they shouldn't have known. No reason they would have. How is it piss poor product development by HTC when they aren't the ones who developed this particular component?

If i sell you a phone case, how are you meant to know you cant use it because its meant to be exclusive to mr x for 6 months? your not and how would htc know the intricate details of ANOTHER companies contracts with ANOTHER company?

Dear ST Microelectronics, we are interested in purchasing your microphone technology. Please provide us with a list of current customers who are using your product so that we may contact them. Also, are there any agreements between you and any other manufacture that would infringe, prohibit or otherwise adversely affect our inclusion of your technology in our phones.
Thank You
The Smart Guys at HTC

Did you miss the part of the article that stated ST thought it was a 6 mo. Exclusive to Nokia? How was HTC to know specifics of confidential documents between other firms? Other than based upon what they are told by their vendor .

of course
nobody normal who is working with milions worth contracts dont know small details in them like dates and other little things.gimme a break

Did you miss the part of the article that stated ST thought it was a 6 mo. Exclusive to Nokia? How was HTC to know specifics of confidential documents between other firms? Other than based upon what they are told by their vendor .

Looks like Jerry did not read the source allaboutphones article.
The top summary of the article clearly states that the ban is till February 2014.
Not sure, how many months from April 2013 to Feb. 2014.

(You don't make things up, right?)