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HTC's supplier allegedly stole microphone technology that it had produced for Nokia on contract

As the old saying goes, "When it rains, it pours."

Thus far it's been mainly stormy weather for struggling Taiwanese phonemaker HTC Corp. (TPE:2498), which saw its "hero phone", the HTC Onestymied by supply shortages.  Now just as HTC appears to be expanding its deliveries on the 1080p Android handset, it's been hit by another setback from a familiar foe.

A suit in the Amsterdam District Court, Netherlands has been filed against HTC and its microphone supplier, Geneva, Switzerland-based STMicroelectrics N.V. (EPA:STM), looking to block shipments of the HTC One.  And on Monday Nokia announced that it had won a preliminary injunction against the One, an injunction that it will look to mirror in other markets.

According to Nokia, it invented, engineered, and designed the microphones that are currently used (without permission) in the HTC One.  It said it had used the microphones in its own phones, but supplier STMicroelectronics funneled the technology to Nokia's Taiwanese rival.  

Comments a Nokia spokesperson; "HTC has no license or authorization from Nokia to use these microphones or the Nokia technologies from which they have been developed."
HTC BlinkFeed
HTC's microphone on the one was allegedly stolen from Nokia.
The microphone in question was billed by HTC as one of the phone's selling points.  HTC dubbed it a "dual membrane HDR".  Nokia felt this sounded suspiciously similar to the "high amplitude audio capture" mic that it designed for capturing subtle details of music or speech.  It took apart and HTC One and inspected the mic, allegedly finding evidence that its technology had been pilfered.

As virtually all handsets today are manufactured in China, a preliminary injunction -- a ban on shipments into a region -- has become a powerful litigation tool that multiple phonemakers have looked to use against each other, of late.

This is hardly the first time Nokia has been down this road.  A pioneering veteran in the phone industry, Nokia has filed around 40 cases against HTC, a relative industry newcomer.

HTC and Nokia are both vying for third place in the smartphone market.  Nokia is the biggest seller of Windows Phones, while HTC is among the largest Android phonemakers.

The injunction for now only blocks sales in the Netherlands.  But it represents yet another painful delay for HTC.  These delays have cost HTC a potentially head-start on Samsung Electronics Comp., Ltd.'s (KSC:005930) Galaxy S IV.  While HTC's unibody One is an eye-catching design, HTC has traditionally struggled to compete with Samsung in marketing.  Now it will have to do precisely that, even as it struggles with patent litigation.

Source: Reuters

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Theft is theft
By melgross on 4/23/2013 9:42:58 AM , Rating: 2
Sorry, but if you steal something, you shouldn't be allowed to sell it. If we did it, we'd go to jail. They should suffer some meaningful penalty too.

RE: Theft is theft
By xti on 4/23/2013 10:21:08 AM , Rating: 2
well not being able to sell in that area is pretty meaningful.

title was misleading, i saw EU and thought the whole continent. yay page clicks.

RE: Theft is theft
By smilingcrow on 4/23/2013 1:40:12 PM , Rating: 2
Likewise, shoddy journalism.

RE: Theft is theft
By maugrimtr on 4/24/2013 7:32:04 AM , Rating: 2
The Netherlands is NOT the European Union. It is just one of 27 member states, each of which is an independent sovereign state. The authority of their court does not extend beyond their small and below sea level borders. What next in the news, DT?

Delaware legislators ban cats in North America.

I'm sure Delaware has sufficient authority to enforce a ban across the whole continent just because it exists on that continent...

The headline is misleading if not an outright lie.

the HAAC tech
By chµck on 4/23/2013 9:44:49 AM , Rating: 2
RE: the HAAC tech
By Alexvrb on 4/23/2013 9:33:20 PM , Rating: 2
Whoa that's really sweet for a smartphone! My Klipsch 2.1's came to life whenever they switched to the audio data captured by the 808 (watched it in HD to make sure the sound streams weren't hamstrung by youtube too badly).

Now I can see, err hear , why they are so protective of this. I'd definitely like to see this used in more Nokia phones, especially their WP8 version of the 808.

RE: the HAAC tech
By chµck on 4/25/2013 12:14:51 AM , Rating: 2
I think all their Lumia phones, except the 520, use these mics.

RE: the HAAC tech
By chµck on 4/25/2013 12:17:58 AM , Rating: 2
Nokia has amazing technology.
They just need to toot their own horn.

Wish them success
By Dorkyman on 4/23/2013 11:29:08 AM , Rating: 2
Wow, a gorgeous phone. I hope HTC does well with it.

maybe it is just me...
By CaedenV on 4/23/2013 7:22:19 PM , Rating: 2
but wouldn't Nokia want to play nice with HTC? I love my L920 and all, but today HTC has a ton more recognition in the market than Nokia does (at least in the world of smart phones).

I am not saying that they look the other way, because obviously they need to protect their IP and all, but you would think that they could work something out. Something like "we will let you do this, but in return you will need to x" where x is either royalties, or a forced pattent lease agreement that starts affordable, but gets a bit rediculous down the road when HTC gets back on their feet, or something.

Every block of a sale of an HTC One is a win for the GS4, not a potential sale of a L920. L920 is a great and solid phone, but it is not a sexy phone like the One is. And people buying the One are looking for a high end Android phone, these are not people who are simply in the market for a generic high end smart phone.

Do what you can to help HTC today while profiting from it later, because helping HTC is the best thing Nokia can do to fight Samsung in the future.

A microphone....
By Cheesew1z69 on 4/23/13, Rating: -1
RE: A microphone....
By safcman84 on 4/23/2013 9:49:18 AM , Rating: 5
Copying of a piece of technology is a bit different than suing someone because they used a rectangle with round corners....

RE: A microphone....
By Nortel on 4/23/2013 9:50:11 AM , Rating: 4
The HTC One contains a component which was "invented, engineered, and designed [by Nokia]". Since HTC can't remove this hardware component from the phone, the whole phone is thus subjected to a ban based on containing stolen technology. If you were Nokia in this situation, would you grant HTC a free pass at using your technology with no repercussions?

RE: A microphone....
By mcnabney on 4/23/2013 10:03:24 AM , Rating: 3
Shouldn't Nokia's beef be with Switzerland-based STMicroelectrics N.V. only? The vendor sold something that it didn't own. HTC should also sue the Swiss firm for the total cost of their loss in deploying the Hero.

RE: A microphone....
By othercents on 4/23/2013 10:34:11 AM , Rating: 2
Shouldn't Nokia's beef be with Switzerland-based STMicroelectrics N.V. only?

Yes and No. If Nokia notified HTC of the infringement and they continued to use the part regardless of the notification than HTC is just a liable. However there are lots of things that could be considered like HTC trying to license the technology and Nokia being unwilling to license it. The other issue is we don't know what the agreement between Nokia and STM was. If the agreement allowed STM to sell to other companies if Nokia was unable to meet a certain supply requirements, then STM would have been in their rights to sell the part to HTC.

RE: A microphone....
By Samus on 4/23/2013 11:46:44 AM , Rating: 2
I agree. Sounds like ST Micro screwed HTC.

RE: A microphone....
By Demon-Xanth on 4/23/2013 11:55:18 AM , Rating: 3
Yup, the courts did say that HTC wasn't at fault and already produced handsets can still be sold. HTC didn't know about the deal.

RE: A microphone....
By Dug on 4/23/2013 2:56:15 PM , Rating: 2
Nokia's claim should be again STM and not HTC, but this is also a way to cut into your competitor. If Nokia was a class act they would just go after STM and ask them to pay the damages without interfering with HTC's sales. In fact the more that HTC sells, then the more Nokia could collect.

I don't think any consumer would make a buying decision on that one component anyway. I personally didn't know Nokia had it.

RE: A microphone....
By Demon-Xanth on 4/23/2013 11:52:46 AM , Rating: 2
Nokia had a 12 month exclusivity contract with ST, there are still 10 months left in it. Next year HTC can use it just fine.

RE: A microphone....
By Nortel on 4/23/2013 1:35:14 PM , Rating: 2
Easy solution... HTC sticks all the phones in a warehouse and after 10 months goes bankrupt.

RE: A microphone....
By Demon-Xanth on 4/23/2013 2:00:59 PM , Rating: 2
Or uses a different microphone. They're not blocking all phones, just ones that violate the Nokia/ST exclusivity agreement for this component.

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