HTC is working with Qualcomm to circumvent US ban on mobile phone imports

HTC is working with Qualcomm to update a component of its flagship phone, HTC One and other types of handsets, in order to circumvent the import ban that U.S. authorities may have imposed on these handsets, according to sources familiar with the issue. A judge at the U.S. International Trade Commission (ITC) last week made a preliminary judgment that HTC violated Nokia's two patents, which were linked to enhanced signal transmission and telephone answering. In a document submitted to the Committee, Nokia said the chips covered by the patents were produced by Qualcomm. The patent case only involves older HTC handsets, but sources say HTC One and other new HTC smartphones using the same technology will be barred from importing if the International Trade Commission decides to maintain the verdict next January. Qualcomm did not comment on whether other clients would be affected by the US International Trade Commission's decision. The lawsuit has made HTC embroiled in the global smartphone patent war again, and if HTC One is barred from importing, it will be a heavy blow to the company. HTC has forecast that it will suffer a quarterly loss, which is the first loss since its IPO in 2002. Nokia said it believed HTC One also violated the company's patents, and that any possible ban should cover the flagship smartphone. Nokia has launched a global patent lawsuit against HTC, while Apple has sued HTC, though the two sides reached a settlement last November. According to Barclays ' estimates, the U.S. market accounts for about 20% of HTC's smartphone shipments. HTC peaked in 2010 and became the world's leading Android smartphone maker, but then faced the dilemma of not being able to keep up with rivals such as Samsung's fast-growing pace. After the US International Trade Commission ruled last week, HTC said it would "continue to prepare a standby plan to ensure that its business is not interrupted". Prior to the Commission's final decision, HTC still had time to devise technical alternatives or persuade the Committee to rescind its preliminary decision. In addition, HTC can reach a patent licensing agreement with Nokia. For now, HTC has declined to say whether the two sides are negotiating. Nokia's lawsuit against HTC was launched last year, when the latter did not start selling HTC One. A source familiar with the matter said that since the patents involved were hardware based, a workaround would be more challenging for HTC than the previous software-based patent case. In 2010, Apple launched a software based patent lawsuit against HTC. At the same time, a local court in the United States has also accepted another lawsuit by Nokia against HTC. If the court decides that HTC infringes on Nokia's patents, HTC will notDo not pay the money to Nokia. In recent years, Nokia has launched numerous patent lawsuits against its rivals around the world to protect its more than 10,000 mobile communications patents. Nokia had previously estimated that its royalty revenues would reach around € 500 million (about $675 million trillion) this year. Last year, sales of HTC one x and EVO 4G LTE were forced to be postponed for two weeks because of the decision by the US International Trade Commission that the phones violated Apple's patent. HTC then canceled the patent function to continue its sales campaign.