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HTC found not to blame in microphone dispute with Nokia, looking at new replacement designs

More information has come to light on the drama unfolding between Nokia and HTC. The Finnish manufacturer was granted a preliminary injunction against the HTC One due to an identical microphone component being installed by ST Microelectronics. It has now been found that HTC isn't to blame, but the component provider for breaching the contract with Nokia.

The courts have imposed a 10-month ban on ST Micro selling the dual-membrane microphone that were designed and co-developed by Nokia. It's reported that miscommunication led ST Micro to believe that the exclusivity agreement for Nokia was just six months, when in reality it's twelve months. The exclusive deal period has been extended by a further six months as a penalty.

As noted above, HTC were found to blameless in this situation as the company could not have known the details of a confidential agreement between Nokia and ST Micro. HTC faces no penalties and its products affected are not banned in any market. HTC has also released a statement detailing plans to transition to "improved" microphones.

via: Android Central (1) (2); thanks, Jonathan and everyone else for the tips!

Rich Edmonds
Rich Edmonds

Rich Edmonds is Senior Editor of PC hardware at Windows Central, covering everything related to PC components and NAS. He's been involved in technology for more than a decade and knows a thing or two about the magic inside a PC chassis. You can follow him over on Twitter at @RichEdmonds.

  • I kind of feel sorry for trashing HTC all these time.  I've seen the HTC One is person, and it's such a striking beauty!  I hope this phone does well!
  • HTC One has been lauded for its unique beauty. The GS4 will never hold it's head up high when paired with The One. Even the the 920 maybe beated by The One. NOW IF ONLY THIS BEAUTY RUNS WINDOWS PHONE 8, i will diss my Lumia and dependence to Nokia and take this beauty as my daily driver... IF and ONLY IF. Haha
  • It's not beautiful on the inside.
  • It does look beautiful and the blink feed make it so. Why? It has that metro look and feel to it that WP enthusiasts love! Swipe to the left you get that same ol overwrought Android UI. In a sense, HTCs sense has WP DNA written all over it.
  • HTC should have still been penalised and banned from selling devices that contain the Nokia component. If HTC was not to blame then they could always sue ST Micro for the loss and damage they have incurred as a result.
  • This makes no sense... HTC had no idea it belonged to Nokia. It was a confidential agreement.
  • "As noted above, HTC were found to blameless in this situation as the company could not have known the details of a confidential agreement between Nokia and ST Micro"
    Way too repeat what you read!
  • Ya but he means that the contract was breached by ST Micro and they should be the ones paying damages. Even though HTC is not at fault, the injunction should hold (because the device is still infringing) and the money HTC loses should be covered by ST Micro. Just because HTC is not at fault, doesn't mean Nokia should be ok with the device unlawfully containing their microphone being sold in the market.
  • Anyone who went to college and took any business class with half the brain size should've known that it wasn't HTCs fault. I was really disappointed just how many bias/uneducated people there were at this site when the story first broke out. Shame on you people. That tells me something demographically wise.
  • Same can be said about you hon.
  • Enlighten me.
  • Whether you meant to or not, you just insulted anyone who did not attend a business class/college. Please re-read what you wrote and try to look at it from that standpoint.
  • GET EM'!!!
  • Right... Which is exactly why you don't go out and make false accusations just like when gossips spread. That doesn't require any degree in college. My point is if you don't know the whole story, don't say anything stupid that is going to make you look bad.
  • GET EM'!!!!
  • Absence of evidence is not evidence of absence. We cannot possibly know if HTC truly knew the provenance of its microphone components. I believe that the b-school educated HTC execs would have been suitably doubtful that an OEM could produce such innovation. But there is no paper trail. The blame falls on st electronics. One can only fight law cases when they have evidence to work with. The evidence only implicates ST. So be it.
  • "nothing someone types with their thumbs has ever been important"
    -Gin Rummy
  • You're right, he did inadvertantly insult anyone who did not attend a business class.
    Let me correct his mistake:  ANYBODY from any walk of life who'd read this story initially and immediately blamed HTC when it was so GLARINGLY OBVIOUS it was STE's fault is complete idiot.
    The rampant rantings against HTC was uncalled for and reeked of ignorance, regardless of those ranter's level of education.
  • GET EM'!!!!!!
  • share the popcorn man!
  • Please break down the demographic? With that pompous attitude, your educated self would've refrained from "scolding" "half brained" individuals.
  • GET EM' (how high reference) :P
  • Haven't you read the original article? People were pointing fingers at HTC without being rational. People took sides. I really don't think I need to break down the population as it is obvious do I?
  • We read the original article along with the comments. That isn't the point. The point is you just summarily lumped people into one group and insulted them for not necessarily having the same education as you, whether by choice or not. Sometimes I think there needs to be a college course on humility.
  • Again you took it too seriously, I wasn't offending anyone. If anyone did, it should've been people who have business degree and still pointed the finger. Like I said, my point was when you don't know what you are talking about, don't get offended by someone who is telling the truth.
  • I understood what you meant and I agree that anyone who did go to school and made the same assumptions are really the ones to be insulted here.
    The other 2 in this thread interpreted your comment to mean that only those who went to school would 'get it' and anyone else must uneducated fools jumping to conclusions.  Personally, I don't read your comment that way, but I can see how it could be miscontstrued.  At the end of the day though... how one interpreted that once again shows the person's mentality to begin with.
  • No its not obvious almighty educated one please tell us the demographics. Furthermore in this day and age HTC could have easily known and proceeded to manufacture anyway, in hopes to not get caught till after they turned a profit. After all its not the first time a company has done this and it will happen again. Another thing shame on your for shaming people for having and expressing an opinion with the facts that were presented.
  • I was being ironic when I said demographically because now I'm the one who's assuming. You said "htc could have", so even you didn't know the whole story right? So what gives us the right to assume it was HTCs fault? Please... Opinion needs i think this happened because... All i saw was i knew it expression in the comment section.
  • Okay will take you at your word that your being ironic. To what gives people the right is that its there opinion. I can assume anything I want and express it all day long. That doesn't make it right or wrong till all the facts are out. Second its was an easy assumption given the fact that HTC should know what there putting in there devices period. Had they done there homework they could have known to ask the right questions. So either they did and didn't care or they didn't and they should have either way they own some of the blame. "anyone with a degree should know that."
  • GET EM'!!!
  • GET EM'!!!!!
  • Lighten up a little man. All our comments are just opinions, and not necessarily fact based. It's not our responsibility to research and find all the facts of the matter before commenting. Who has time for that? Comments are just our opinions on the article as written. And as we learn more facts, opinions could change.
  • Yeah because a company accused of infringing and stealing patents would never be thought of infringing and stealing components. That's just absurd...
  • I majored in economics and even I know, that a multi-billion dollar corporation is supposed to do research before using any technology developed by a different company. This wasn't developed in house by HTC, this was bought, therefore they should've checked the parts.
  • You make me laugh. Are you that naive to think that HTC didn't really know what they were getting? The only HAAC mics on the market are Nokia's atm. Nokia has a patent on these mics. I think it would be someone's job over at HTC to figure out whether or not this technology was owned by someone else. Im sorry, I call hogwash on this entire matter...HTC is just covering their asses because they can't afford an injunction on their well beloved One. It would destroy the company if that happen. .....this opinion coming from a person who is on their 2nd year of grad school....
  • GEEEEET EMMMMM'!!!!! LOL im dumb I'll stop now guys
  • It's okay. You always make us laugh which isn't a bad thing. :-)
  • You flatter me ladydias :D
  • First of all, congratulation on your second year in grad school! Back to the story, HTC was found not guilty in this case. "HTC were found to blameless in this situation as the company could not have known the details of a confidential agreement between Nokia and ST Micro. HTC faces no penalties and its products affected are not banned in any market". This is exactly what i thought it happened when the story first broke out. I don't think they are covering their ass when the seller misinforms their customer. At the end of the day, ST is the one who's lost their credibility.
  • I do, somewhat agree with your initial statement (except for the degree thing...) I knew from the beginning that this was an issue between Nokia and the other microphone company, but its obvious that other ppl did not, especially since the story implied that this was a sort of patent war between Nokia and HTC (which is ongoing it seems). So alot of ppl misunderstood the story. However, I do agree that this is an example of how prejudgment can be completely false. Lastly, this is a forum (with many more pro-Nokia members than any other manufacturer) and so any story that puts Nokia in a winning light is praised (or even exaggerated) even if the facts haven't been presented yet.
    In other words, they're just opinions... I and you (and anyone else) shouldn't be offended. (Although the excessive name calling and rudeness can be extremely annoying!) Just smile....Fridays coming soon! :)
  • Hey thanks bro! Who decided they were not guilty in this case?  A judge...a judge who does not know the ins-and outs of the business environment.  HTC could've very well known what they were getting and just lied about it.  I think the bigger case about how HTC in fact didn't know.  I believe they send out a request to all suppliers first.  The supplier responds by giving the company options.  Obviously Nokia's HAAC mic came in this request as it seemed like the best mic.  Now Nokia does in fact have patents on these mics.  I was looking at it last night in fact.  -Don't you think that even if the supplier sent them a handful of choices of mics and Nokia's mic was what they wanted...they would've done research to see if this tech was owned by any other company first?  This is assuming that the supplier did not in fact know that Nokia had exclusive rights on this tech for a year... I mean logically, even if it was patented by Nokia, and the exclusivity was over, HTC would STILL in fact have to pay Nokia royalties for this tech because it is still in the end Nokia's patented tech.  And yes, I believe that since the only HAAC mics that exist on the market are Nokia's...A company such as HTC  would've well done their research before saying yay or nay to the mic from the supplier. 
  • Not necessarily....i mean take a car manufacturer for example. Every manufacturer I'm sure adheres to a good faith clause which they make the other part manufacturers agree to. It is exhaustive and extremely time consuming to look through thousands and millions of patents each time you need a new part. Lets say there are 1,000 parts to making a vehicle. You would literally spend a year researching through an international patent data base to make sure your part manufacturers are not adhering to their separate agreements. That's too much for any manufacturer to deal with! Now, if they were committing perjury that's between them and the court, but I think its too early for any of us to come to that conclusion...
  • When a supplier tells the buyer "you can buy this, no worries" , every single buyer should assume they are lying and have to re-verify?  You might as well call up Superman and ask him to make the world stop spinning.
    You say it sounds logical and I'll give you that (because it doesn't sound logical to me), but  logic or no logic, it LOGISTICALLY a complete nightmare.  Your business wouldn't last a week working that way.
    This is STE's fault all the way.  If anything, HTC could bring up a complaint and demand concessions from STE, like a discount, rebate or some free units or something.  
    STE loses face here because now every OEM that comes to them for parts is going to have to sit and worry about whether STE are even contractually allowed to sell the parts.
  • You're right...they're reputation is definitely on the line. If the court ruled that they can no longer use the chips in future Ones, then they are definitely entitled to damages (hefty damages at that).
  • You most definitely either work for them or love HTC very much.
  • By that logic, the majority here either work for Nokia, or love them very much.
  • I wonder why :-D
  • My analysis of that data would have been different. There are many variables in it but the biggest is the fact Nokia *only* uses Windows Phone on their smartphones. HTC, and Samsung do not. Their customer satisfaction includes Android, I would argue the higher satisfaction is with the smoother, more stable OS that is "Windows Phone".
  • I still can't really desagree with you :)
  • How can it not be HTCs fault? How can a company not know anything about their product?
  • Can you enlighten me how you arrive at this inflamatory conclusion with the original reporting? I just wonder whether you have been in a top managment position in a product company before. If you have a key product feature that you co-developed with another company, would you sign a contract that enables your co-developer to sell it to any of your competitors in 6 months? If I am HTC, damn well I would have asked ST to double check on it. I would also make sure ST signed a contract to pay me consequential damages if ST did not have the right to sell. Let's see if ST legal department wouldn't double check the contract with Nokia when facing such a clause. HTC found to be legally not guilty doesn't mean that they are not stupid.
  • This really sucks because HTC was just getting the respect they deserve as the HTC one has universally been praised.  I was hoping it would notch Samsung down a peg and allow another successful entrant in the android space.
  • HTC can still have a hit but just have to use a different chip.
  • HTC was found not guilty in the case, so they can still use the chip in the Ones that have already been produced, but I don't know about the future. They already are thinking ahead though with the statement they were looking into producing their own microphones...which in my opinion is the best move.
  • It'll be praised no matter what. Just like Samsung. Those fiends are still loved despite their despicable behavior of badmouthing HTC through paying people to do so. If society has conscience, they wouldn't support that crap but society is materialistic. They'll support fiends by purchasing the S4 like crazy over the better, HTC One.
  • HTC One is beautiful...but the dipshit masses who dig Android will buy the plastic GS4. Sucks for HTC as the One is an amazing device. I am normally NOT an HTC fan either, but gotta give them major props here...
  • In my experience, people who resort to insulting the intelligence of others are often lacking it themselves.
  • This^
    But I don't know how "amazing" it is.
  • I agree with one truly deserves a decent number of sells over gs4...gs4 is jst loaded with features most of which hardly matter on a daily, weekly , monthly use or at any point of time for that matter...the prob is Samsung jst markets the hell outta their phone and creates incredible amount of hype and masses fall for it like sheeps...'dipshit' doesn't sound so bad if you think abt it...
  • I seen the HTC One and I was not impressed. The whole Sense 5 really tried to be "minimal" and somewhat flat as we all know who's leading in that area. I was confused using the camera, hardly any indicators as to what is where.
    I did love the screen and love that the ffc is the same as my 8x.
    What I didn't like was how light it was relative to how they described one piece of aluminum. I wanted a sturdier and heavier feel. It felt like it will break in one drop. I also wasn't impressed with the cameras performance either.
    I still noticed lag in the device, probably from Sense 5, I'm sure android doesn't lag anymore, right?
  • I absolutely abhor sense 5. One of the few things about HTC androids that make me hate it for some reason sense gives you a feeling that your still running froyo for me at least.
  • Haha, where are all the rejoicing Nokia fans now?
  • Still rejoicing it said only phones already sold will not be affected.
  • here. they might as well just licence it and have a proper mic :) Not sure where people said it was htc fault. in every article it was mentioned that it got delivered by ST electronics.
  • Nah... STE had nothing to do with this... STM is another company. :)
  • Im still rejoicing. The only HAAC mics on the market are Nokias so pretty soon, the HTC One will have an inferior non-HAAC mic. Lol better get the one now, it just became a collectible.
  • You do realize Nokia is going to get paid well because of this breach in contract?  Also, HTC will lose one of their main features.  It's not like there are lots of other high quality mics out there.
  • Nokia need to get a grip!
  • Why for getting the courts to make st electronics to hold up their ends of the deal??
  • STM, not STE.
  • The problem was never Nokia but media center reporting falsified stories
    Quoted from Android Central
    In light of several misleading stories regarding a recent injunction obtained by Nokia against STM (a supplier of components to HTC in The Netherlands) HTC looks to clarify the following points: Nokia has NOT obtained an injunction in The Netherlands, or anywhere else, against the HTC One.   The Dutch proceedings were brought by Nokia solely against STM. HTC was not sued by Nokia in the Netherlands.   The Dutch injunction prohibits STM from selling certain microphones to any company other than Nokia for a limited period.   The judgment against STM states that HTC can continue to use microphones already purchased from STM in its products, because they were purchased in good-faith. Nokia's attempt to obtain a recall of microphones already sold to HTC failed.   HTC will transition to improved microphone designs once its inventory of STM microphones is exhausted.
  • You should get a job writing for one of these sites. :)
  • +1 for the pic.
  • See how Android central writes about this. They said in their article the ban is for 6 months only. 
    However their source article(allaboutphones) clearly states that it is till Feb. 2014. 
  • Yup. This article here mentions 10 months...
  • I believe the article said an additional 6 months from when the contract period was supposed to end.
  • The article did not specify that clearly.
  • The Android Central article doesn't mention it (unless I missed it) but the WP central article does.
  • Glad HTC didn't suffer too much from this. Hopefully their HTC One does well because it is such an impressive phone, in my opinion better that the S4 or anything else android out there right now. Good for Nokia taking care of business and putting ST in their place....
  • Lenovo K900 IMO is probably the best phone but will never hit this US market any time soon or at all for that matter. Running Intel Clover dual core and out performs any quad core Snapdragon 600 that is out currently. (HTC One, SGS IV).  Hands down best phone out but no one will ever know.
  • What's the reason for Lenovo not releasing the phone in the U.S?
  • Iono.  But I know the only market is hitting next month is China wtih Kobe Bryant being the spoke person.  China have alot of nice Android Phone that will never make it this way.  Oppo 5 and  Xiaomi Phone 2S being two of them. Hell even the Sony Xperia Z is underrated and not in the state yet. TMo is suppose to get it.
  • The only reason it's the best is because of its processor? Doesn't seem like a very good reason to me.
  • Hmmm let's see
    Stainless Steel frame ?
    5.5 inch IPS LCD 1080 x 1920 pixels @ 440 ppi ?
    Dual Sim ?
    Intel Clover Trail Dual Core @ 2 GHZ that out benchmarks a quadcore or even the octo core?
    16GB Internal 2GB Ram Micro SD Slot up to 32GB?
    PowerVR SGX544 GPU  (Same that SGS IV will use) ?
    6.9 mm thin?
    13 MP Camera with Sony Exmor RS Lens with F1.8 focal length?
    Fast charge to charge your phone in 90 mins?
  • that'll be 400ppi ;)
  • Thx for correction
  • I'm not naive enough to think that HTC didn't know what was going on. There is only one kind of HAAC mic on the market and it is simply Nokia"s technology. Nokia have patents on this R&D.... My two cents.
  • HTC One is one of the most beautiful devices I have owned, and next to my HTC 8X, has proven that HTC has the chops for good design. If only they had the marketing talent. A One with Windows Phone 8 Blue would surely gain my interest. Come on Microsoft, get that 1080p update out not!
  • I hate to burst tue bubbles of B-School aficionados, but out here in the real world, this is clearly a case of willful violation of the Agreement between Nokia and its Supplier, and to maintain that HTC had no role in it is laughable. The game with Suppliers is played very adroitly, with both sides knowing that they are violating third-party Agreements, but it will only happen when the Supplier played its part of assuming all the legal risk by never creating a paper trail that would expose the new Customer. So the profits roll in and all is well, unless you get caught, and then the Supplier faces a small penalty at worst.
    Can you seriously believe that the Supplier was "confused" about the period of exclusivity? Get real! That's the most important Term of the contract. And if you think for one moment that HTC wasn't aware that this was Nokia's development than you'd have to believe that they don't tear down every competing phone as soon as they can get their hands on them, and inspect every part and trace to their manufacturing source. Nokia was making a big deal over this mix, so who believes they would do so if they didn't have exclusivity over it? Right. Me neither.
    Out here in the real world you learn fast that B-School classes are interesting theoretical exercises, but nit how things are actually done. If you believe HTC's line of BS, then I expect you also believe that J.C.Penny's CEO can't read a contract and didn't know he was violating the terms of Martha Stewarts's agreement with Macy's. Sure. We all know that Big Companies would NEVER violate a Contract! Only little companies do that.
    Uh huh.
  • I was thinking the same thing, and I like the way you explained it.
  • Hurray, I can see that you have been in the mix of business. The self proclaimed business course taker has zero experience in business dealing and shows his ignorance.
  • +1000
  • All I can say is that HTC, specifically the HTC ONE, benefited from this mess. This technology was invented and developed by Nokia in coordinaation with STM and if other company such as HTC would like to have this feature also, then they must wait until next year when the exclusivity expires. As Nokia said, this HAAC chip is unique and not offered by other component manufacturers. There's no way HTC could have developed similar technology in 6 mos time to replace this chip "unless" copying and piracy is involved. I still feel bad for Nokia, again tricked and robbed of their technology.
  • That's it? Since STM did make a profit selling those mics to HTC, shouldn't there be at least some monetary reimbursement to Nokia?
  • I read somewhere that, as part of NDA, every chip sold by STM within exclusivity period has a penalty of 50,000 euros.
  • Here is the article, but I guess the maximum penalty is only 1M euros. 
    "STMicro will have to pay Nokia €50,000 (£43,000) for each microphone sold to others, up to a maximum of €1m."
    Of course, aside from this penalty, Nokia for sure will have %share from the sales.
  • such bull that they didn't know. they advertised that feature like they developed it
  • No, they advertised their camera, speakers, Zoe, BlinkFeed, and screen.
    Never have I ever seen any ad for a microphone.
  • ....don't tell me HTC didn't know what they were buying. In this industry, parts supplier have to sign contracts stating that the parts supplied do not interfere with third party rights....
  • This would've never happened if HTC put more money on R&D instead of using others technologies...