Taiwanese mobile phones manufacturer HTC Corporation announced that it has acquired S3 Graphics, a company specializing in graphics chips, for $300 million to be paid in cash in a deal that should be completed by the end of this year.

S3 was bought in 2001 by VIA Technology, which intended to use its know-how to improve its microprocessors and chipsets. In 2005 however financial problems led VIA tp sell about half of it to WTI International Investment, of which VIA’s president is a shareholder. Now the two companies will split nearly equally the $300 million and according to the agreement VIA will still be able to use its patents.

At first it was thought that HTC will have the opportunity to produce their own chips for smartphones and tablets however according to the latest news the actual target of the acquisition were the 235 S3’s patents.

Lately every day there are news about lawsuits or extrajudicial agreements concerning the use of software or hardware patents. Microsoft claimed they have rights over some technologies used in Android and some smartphone manufacturers have already signed agreements to pay Bill Gates’ company to avoid a litigation.

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Android is a Linux-based operating system, just a few years ago Microsoft called Linux a cancer. Thus we reached a paradoxical situation because now Microsoft earns more from Linux than from the Windows version for smartphones.

Among the companies that have already made a deal with Microsoft there’s HTC however among the technologies that S3 licenses to other companies, including Microsoft, there is the “S3 Texture Compression“. Now we’re going to see how the relationship between the two companies is going to change.

Another competitor for HTC is Apple. A fresh news is that Apple was accused to violate two S3’s patents so now HTC might be in a strong position against it.

These are two examples of ways in which relationships between two companies can pass through patents and why nowadays software and hardware patents can become weapons, defensive or offensive depending on the circumstances. The fact that 235 patents are worth a total of $300 million says it all.