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By 7 July 2011 | Categories: news

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Taiwanese chip design firm VIA Technologies has announced that it has signed a definitive agreement with fellow Taiwanese company and smartphone manufacturer HTC, to sell all of its shares in graphics chip maker S3 Graphics

According to the terms of this agreement, the total consideration for all outstanding S3 Graphics’ shares amounts to $300 million (around R2.014 billion). HTC will fork over $147 million (approx. R987 million) to VIA Technologies and the remaining $153 million (about R1.027 billion) to private investment company WTI. The latter assisted VIA in funding S3 Graphics’ operations and R&D initiatives.  

According to PC World, Taiwanese smartphone and tablet PC maker, HTC, will expand its patent portfolio due to the purchase. After this acquisition is completed, HTC will own the rights to S3 Graphics’ entire portfolio of 235 patents as well as pending applications, which also includes a number of patents for graphics visualization technologies.

A certain number of these patents have already become the subject of litigation against other smartphone vendors, so this deal should also provide HTC with a patent lawsuit protection buffer involving similar litigation.

Examples of this litigation includes a US International Trade Commission (ITC) judge recently ruling that the iPhone and iPad maker Apple, infringed upon a couple of S3 Graphics’ patents dealing with systems and methods for compressing images.  

The latter is particularly interesting in light of the fact that besides being involved in a patent litigation saga with Samsung, Apple has also sued HTC, claiming that the company infringed upon 20 of its patents that have to do with the iPhone’s user interface, architecture as well as hardware.   

"The transaction would allow VIA to monetize a portion of its rich IP portfolio, yet retain its graphics capabilities to support the development and sale of its processors and chipsets," said Tzu-mu Lin, senior vice president and board director of VIA.

"We wish to thank WTI for its capital contribution to support S3 Graphics since 2005."

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