ST Microelectronics allegedly provided parts designed by, and for Nokia's sole use to the Taiwanese manufacturer

An Amsterdam district court has granted Nokia an preliminary injunction based on the hardware components in HTC's new One phone. It seems the dual-membrane microphone setup in HTC's latest was manufactured using technology "exclusively for Nokia" by ST Microelectronics.

According to sources at Engadget, ST used patented tech and breached an NDA between themselves and Nokia to build the microphone, which shares a common identifying number between the components used in the HTC One and the Lumia 720. While there is a very good chance that Nokia will also pursue action against ST Microelectronics, the first step is to try and put a halt to the sale of devices that have the offending parts inside. In a statement to Engadget, HTC says they are "disappointed in the decision", and "are considering whether it will have any impact on our business and we will explore alternative solutions immediately."

In Nokia's defense (though they don't need any), this is different from squabbles over software patents. If what they are saying is true, ST had no business selling the fruits of Nokia R&D to any company other than Nokia, and they deserve ample compensation. But HTC is the last company that can afford to be caught in the crossfire of this sort of mess.

Source: Engadget; via: WP Central


Reader comments

A Netherlands court agrees HTC One may be using microphone technology exclusive to Nokia


This is gonna sting.Didnt the prez of HTC say if the One didnt sell good,he would step down?or something to that effect.

I think it was the CEO, Peter Chou, who said that.
I adore the hTC ONE and really hope that hTC continues to give consumers android smartphone choices other than Samsung!

I see a lot of online comments to buy the HTC ONE before it is recalled and this chip is removed, thereby getting the old versions that have the chip intact.

Just a word of warning, in legal cases like this I have seen patented functionality like this crippled or disabled entirely via firmware. So unless you want to stay on v1.0 firmware forever with your device buyer beware. Someone may come out with custom firmwares etc that keep it enabled but that is expensive gamble to take.

Wow, HTC just cant win. It's not their fault ST sold the chips to them. I'm not a lawyer but if this hinders sales of the One they should seek legal action against ST. Just my opinion. It's frustrating to see this phone hit so many roadblocks.

I'm afraid hardware development doesn't work like that. Specifying electronic components isn't like buying potatoes the designers of the HTC One would have to have known the detailed specifications of the device in question to have used it in the phone.

It's highly unlikely that someone at HTC (at least at the engineering level) didn't know exactly who designed the microphone.

I don't think you can state that so affirmatively. It is entirely possible HTC had no clue at all that the technology was not supposed to be available to them.

If that's the case, HTC engineers are either all stupid or sabotaging their own company intentionally.

Keep in mind, the lawsuit is not saying HTC knowing used a Nokie component. But rather that ST violated the NDA they supposedly had with Nokia. I don't see how anyone at HTC would know about the NDA between Nokie and ST. I mean isn't that the entire point of a NDA?

You can bet the farm that HTC will sue ST as a result of this. However, HTC will lose a lot of money before that happens. Recalling the device, re-engineering the product, wasted money for marketing of a device that is not available, reshipping and relaunching the device, new marketing dollars - all while they lose marketshare and mindshare as a result of using Nokia's technology.

So, yes, ST is going to get hit with a big lawsuit. But, keep in mind HTC is already on tenuous financial ground and this will likely hurt them badly before that trial even occurs.

You're not a lawyer or a businessman, eh? Nokia will just sue for royalties and/or sell HTC the license and get a % of each device sold. Still a big hit to HTC...

Just got off phone with pres of HTC,he didnt think your joke was funny.As for me,I hit the floor LMBO.

Sorry hardware supply doesn't work like that. ST wouldn't have been able to advertise the device without Nokia noticing. HTC engineering would have needed to request the part and detailed specifications of the device from ST to include it in the phone.

So by your logic, HTC designed the hardware, and had ST build it for them. 

In reality, ST probably approached HTC and told them what they could do with this part. HTC builds phones, not microphones. Or LCDs. Or processors. Etc. You're giving HTC engineers too much credit here. They assemble products from pre-existing components that meet their needs at every opportunity.

Having said that, the software engineers did have the full and complete specs used for the production of the microphones, but I doubt the subject of confidentiality agreements were disclosed in those specs. 

Well, I've been designing electronics for six years. When I design a board and specify the part I need to know all that part's datasheet, details of it's availability and more. Sure I get reps (or "field application engineers" as they insist on being called) come tell me what parts I should and shouldn't be using. Do I just say "Yeah ok we'll put that in". No; I order engineering samples, test the device, depending upon where its from I even check it's provenance.

Given the sensitivity of the IP that goes into consumer electronics you'd think HTC would know the who/what/where/when and how of all their key components.

I think you are giving HTC's engineers too little credit. Electronic engineers don't just assemble a device from pre assembled components any more than an author just assembles a novel from pre existing words.

Your argument that HTC is to blame makes no sense. You suggest that HTC engineers would or should have requested specs on the microphone. The supply company would have supplied those specs and HTC would have examined them to determine how to fit it into their design or if it could fit in. But no where in this hypothetical exchange would they have known who's ip it was. Why would the supply company disclose that? They are obviously shady and shady people usually don't disclose that the car stereo you are buying is stolen. It tends to kill the sale. So it's befallen on to HTC to examine all tech they receive through legitimate business transactions as if they were stolen?

So the HTC design engineer (who needs to know all the electrical and mechanical specifications of the microphone in order to use it in the product) happens not to notice that the key advantage of this microphone is exactly the same as one of their competitor's proprietary IPs? The HTC marketing department when liaising with the engineering team on how to sell this key feature, also "doesn't notice" that this key feature is suspiciously similar to their competitors.

Then you compare ST micro, one of the largest semiconductor fabs in the world of being the industry equivalent of car stereo thieves? Wow.

Yes it is down to HTC's engineers to conduct due diligence on the parts they are specifying, for precisely this reason. Where there is doubt you consult your management.

Your conclusion would be that they sold the part to Nokia and now they are selling the same part to you. To expect them to infer an exclusivity agreement between the two is unreasonable.

In the highly litigious mobile space these engineers are specifically FORBIDDEN from knowing what their competitor's IP is. Not only that, but, as the story says, ST was under an NDA where they were legall disallowed from mentioning whose IP it actually was. HTC could not have known.

Not to mention that ST knew this part was not theirs to sell, but sold it anyways.

First rule of NDA, you don't talk about the NDA. Seriously, its really not that hard to understand. Short of HTC hacking into either Nokia's or St's computers, they would not have known it was under NDA. Your example only show HTC could have known it was a part Nokia used. Not that ST did not have a licence to sell it to others.

That is not the same part.

Firstly both packages it is available in are different (it is definitely not a PQFP device that HTC has, and the second package ST offers is square - the one in question is rectangular).

As for this whole mess, the blame really lays mainly with ST (I expect they will lose a lot of business over this), their reputation is in tatters, I know I would not touch them with a barge pole if I was looking for a reliable wafer fab partner.

HTC should have known since it was a key technology, their only defense could be ST sold the device as being their own technology. But to be fair to them you would expect something like this from a dodgy far eastern fab, not ST. I expect Toshiba, NEC, IBM and others will be queuing up outside the doors of STs customer base as a breach of trust like this is pretty serious.

In the short term though this really hits HTC bad, they will to suspend sales of Ones, while they should sue ST I'm not sure if they will be able to recover that amount of money if their flagship phone is delayed 6 weeks or more.

Designing for 6 years and you're already an expert on global electronics companies? Wow!

After a few more years you might realise that engineers will often not do patent searches or lookup patent details especially if their products are to be sold in the US due to the way the legal system works. In fact many tech sites will actively warn readers if the article might contain detailed information about a patent.

Do you also think that companies go to Qualcomm, Nvidia or Intel and specify what they want in their next chip or do you not realise that these companies create market leading chips and then promote/sell them to manufacturers to design their products around? A lot of manufacturers won't even use some of the features on those SoCs but the rest of the package fits their needs. In fact some of the SoC companies are mostly responsible for setting the final spec and features of your phone and the industry not the manufacturer. Similar with non-electronic components such as Gorilla glass - this is designed and sold by Corning not designed and specified by the companies.

So if a company is promoting, marketing and selling a product to your company extolling the benefits and the cost and size work for you then you have to trust a big company like ST that they are cleared to sell them, not expect them to be ripping off their other customers.

No-one knows whether the subject of IP was brought up in the supply contract or whether HTC were given false reassurance but I bet the engineering dept didn't deal or be expected to deal with that side of things (whatever your 6 years as a hobbyist solderer might lead you to believe).

With the amount of patent suits flying around and sites like iFixit tearing down devices to their component form the day they get hold of them I think it's a fair bet that HTC didn't know the extent of the Nokia IP and contracts (assuming everything from Nokia's side is true).

Hobbyist solderer? Sorry you really don't know anything about what I do. So please keep such childish insults to yourself. I am merely offering an informed opinion based upon my experiences with distributors and OEMs.

Based on the datasheet (nice find) I agree ST is misrepresenting the product.

Exactly, you were trying to present an opinion as though it was informed and based on fact when in reality it was completely uninformed and based on personal opinion (stemming from a whole of 6 years experience!). Anyone involved in the actual industry could see how this situation might have come about.

Your lack of use of IMHOs, "perhaps...", "it could be possible that..." and "in my limited experience..." and instead use of "I'm afraid hardware development doesn't work like that.", "It's highly unlikely that someone at HTC...", "Sorry, hardware supply doesn't work like that." and "Yes it is down to HTC's engineers to..." was the issue.

Actually EdSherrif is right, at that level of design HTC's engineering department should have known and done full research on the device, especially with the amount of legal action going on with Smartphones.

While it is shocking that ST effectively sold them an illegally copied part it does reflect badly on HTC, a multi-billion pound turnover company like that should be very careful with its decisions on its flagship product. I think this is a symptom of a understaffed R&D department and corner cutting.

I work in electronics and I can confirm that we do not just see a spec sheet and buy the device from anyone without checking, and the company I work at now is tiny compared to HTC. Although while I see dubious far eastern devices on sale I would not have expected ST to effectively sell a knockoff :P

Here we go again: It's not HTC's fault it is everyone who tricked them. I'm having deja vu all over again (remember when HTC's poor multitasking was a design feature not a flaw)? Any smart phone company, from the lawyers to the engineers, that doesn't research where their components are coming from in this patent crazy environment doesn't deserve to survive. The HTC apologists can't seem to face reality. If you manufacture a product you are responsible for what goes into it. I suppose you think Ford could say we are not recalling our cars because the air bag patent infringement is the fault of the supplier. They'll have to do it. Give me a break.

Yes....but that doesn't mean that ST told them about the exclusivity deal. You don't know what you don't know.

Sounds familiar. I had to go through the same thing with my EVO LTE. Glad I have moved on from HTC.

The blame could fall on both companies. HTC should know what parts are in their phone and should also know if those parts have a patent. Saying that it's all the fault of the supplier... I don't think so.

"disappointed in the decision", and "are considering whether it will have any impact on our business and we will explore alternative solutions immediately."

- doesn't sound like they didn't know to me.

Unlikely. Why would they take such a huge risk if they knew? They had little to gain and TONS to lose, it is a stupid gamble that makes no sense.

Hey Peter,Ive got a nice honey hole we can catch some nice bass.Bring your bass boat,something tells me you're gonna have alot of free time on your!!!!

Yeah, this is probably the only viable option for HTC, and it's going to cost them some cash. Nokia knows they have HTC over a barrel, and will negotiate from a position of strength.

This is a shame, and not good for consumers in general. Do we really want the smartphone market to be dominated by just two companies (Apple, Samsung)?

I hope HTC gets this worked out quickly, but we'll see.

They were trying to beat the Galaxy S4 by releasing before them, looks like Samsung has won that battle without trying (even with that stupid student scam in mind). I was looking forward to moving to the HTC one from the note 2.

HTC was never going to 'win the battle'. They are not in a position right now to beat samsung.

The only thing that matters to HTC is that the One sells in significantly higher numbers than their past phones, and helps them regain their position in the market.

Doesn't seem to me that HTC needs to do anything. Seems like there were no patents breached by HTC. "ST used patented technology to make the microphone" What does that even mean. Seems to me like Nokia doesn't have a patent on the microphone because SP makes it and they would have had the patent on the microphone. Not only that there was an NDA that was breached between Nokia and SP. That doesn't have anything to do with HTC. There was an "agreement"/contract between Nokia and SP. SP broke that agreement. I don't see why HTC would have to remove the microphone at all.

Because it's contracted to Nokia? Therefore either a) they'd have to remove it b) disable it if possible (highly unlikely) c) they (HTC) pay royalties. Either way SP will be sued by both companies for damages and time.

Since they've(apparently) changed their name from ST to SP, maybe Nokia won't know where to find them and this will all go away.

Your right, they look cluttered compared to the Nokia one. However I love my HTC One and it's the best phone I have ever had. Puts my S3 to shame.

Hey,hey,hey,watch buddy.Ive got a S3,dont make me come through this computer screen and snatch your microphone tech out your!!!!

So HTC has a contract with ST to deliver parts. Whether or not ST used patented tech to make those parts does not matter to HTC. This is ST's problem. they must pay a licensing fee to Nokia to use this tech. That and they probably will not get many orders from Nokia in the future.

I agree. I don't see how this is HTC's fault or why they should be punished. If anything Nokia should sue ST and they should be forced to pay Nokia. HTC One should not be banned or stopped.

It's like those horsemeat scandals that have been popping up in various countries these last few months. Why should the store take down the product? It's not their fault that some third party meat supplier used horsemeat.

Ok, that may be an analogy bordering on the ridiculous, but at the end of the day HTC is ultimately responsible for their product, and whether or not they are the ones responsible for the incident, they are the one that have to call back the product, just like a supermarket has to recall their product when they found out that their supplier used a different kind of meat than was advertised.

So whether or not ST is at fault is not really relevant at this point.

You seem to be one of the few to actually understand this. HTC contracted with ST. ST sold HTC parts that it knew it had no legal right to sell, and HTC would have not known that it was Nokia's IP due to confidentiality agreements between them and ST. All this does is prevent ST from selling these parts to HTC in the Netherlands.

What will likely end up happening is that ST will pay Nokia a substantial amount to continue to provide the part to HTC, or provide HTC with a comparable part.

Just when I started to think, "Wow, almost every comment so far was actually decent, not the off the wall trolling I expected". Then here you are.

You're welcome. Seriously I don't see how I am trolling, I am speaking from the heart. I have lost good money on these glitchy POS phones in the past and I hope the worst for the company because of it. I bet HTC has driven more people over to Apple with their goofy sense UI than any other OEM.

Didn't say you were, that was actually what I was thinking just before I came to your original comment. Just can not agree with that logic. The smartphones I have had are 3 HTC's, one Motorola, LG, and a Samsung. The Samsung(Galaxy Nexus) was the worst, followed by the Moto(DRIOD 2). The G1 and so far the Nexus 4 are by far the two best phones I have every had. But I don't go around praying for Samsung's and Motorola's downfall. Competition is great, the more companies we have doing their best to outdo each other, the more we as consumers benefit.

This could just all be a foul-up by ST. But any way you look at it it's going to hurt HTC who does not need any more problems then they already have. At the least they will have to pay Nokia for the use of the hardware. And the worst case would be having to recall all devices with the offending hardware. At any rate they will probably have to stop making the ONE till this is resolved.

My 2 pennies. HTC will cave and pay a royalty to Nokia since they can't afford to have anything happen to this phone. The "First" can't save them, only the "One" can start to turn things around.

Second, HTC or at least Nokia will sue ST for their time, hurt feelings over a breached agreement and on principal. ST probably had an exclusive contract with Nokia for the tech, then they turn around and let HTC use it. I'm no lawyer, but I would think HTC has done nothing wrong, should be ST responsibility to NOT give out exclusive tech to others, not the other way around.

Either way, it will probably delay the phone where it hasn't launched, and cost HTC a boatload of money they don't have.

this mic is stolen property in eyes of the law.maybe htc didnt know its stolen goods but that doesnt mean that they should keep it.if you buy car and couple days later police came to your house claiming its stolen,you will lose that car(and money which you paid for it).this is same will lose money one way or another

The injunction only stops ST from selling the part to HTC. If HTC have 1m chips in Taiwan there isn't much Nokia can do. All HTC have to do is in the 2nd run of phones is replace the part. Which may or may not be cheap. Though I think Nokia should be punished for waiting. They must have suspected this month's ago and could have asked ST and HTC but no they wait until the One is available and then do it. ST are legally at fault not HTC (as far as we know at the minute) so really all Nokia can do stop ST from selling the part. HTC are ok apart from having to find a replacement part. Oh and making HTC disable to mic won't happen. Unless Nokia can prove HTC knew and even then would a judge brick a boat load of phones. This isn't some software feature that can be turned off.

I had no intentions of getting this phone as i'm planning to end my 6yr relationship with HTC, however this is tough news nonetheless. This is a great phone and definitely had the potential to keep HTC in the mobile phone business for a little while longer. It sucks to see them hit this kind of hurdle before even fully infiltrating the market. Hopefully they can recover this situation before it get too bad.

What happens with the ppl that already have the device????I'm not a lawer but Nokia should b going after the ppl that sold the chip not HTC!!!!!HATERS NOKIA SUCKS ANYWAY!!!!!!

you do realise that nokia or any company needs to defend themselves or future wont be pretty for them?their name will be weaken and weak name dont sell good products.weak name isnt competitve and doesnt make money.put yourself in their shoes.if you think that their way is wrong i will tell you that sharks in buisseness would eat you alive