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To clarify the Commercial Times (Taiwan) report on July 30, 2011, page A1
1.Name of the reporting media:Commercial Times (Taiwan), page A1

2.Date of the report:2011/07/30

3.Content of the report:Please refer to the Commercial Times (Taiwan) report on July 30, 2011, page A1.

4.Summary of the information provided by investors:N/A

5.Company's explanation of the reportage or provided information:
With respect to the US. Patent and Trademark Office (USPTO) Reexamination of S3Gpatents, we would like to clarify as follows.
1.HTC confirmed today that the USPTO has issued no final office actions invalidating the S3G patent claims. Any reports that “the USPTO has determined that the patents asserted by S3 Graphics against Apple are invalid” are inaccurate.
2.Patent Reexamination is a common defense in patent litigation. HTC has adopted the defense strategy as well. The process of reexamination will take a few years and the Final Office Action issued by the examiner is subject to appeal.
3.A re-examination does not constitute any determination about the validity/patentability of the claims and is independent of the ITC process. The S3G patents remain valid and enforceable throughout the reexamination process.
 
With respect to S3G’s ITC case against Apple, the judge has yet to issue its public version of initial determination and his decision is subject to appeal, we may only provide the public information as follows:
1.The judge issued an initial determination that MAC OS X Devices infringe certain valid S3G patents.
2.The MAC OS X operating system software contains DirectX Texture compression (”DXT”).  The ITC judge's initial determination is that MAC OS X Devices that implement DXT infringe certain valid S3G patents.
3.The MAC OS X Devices contain graphic processor units (”GPUs”) from several different suppliers, including NVIDIA. The judge initially determined that the NVIDIA GPUs infringe certain valid S3G patents.
4.The judge also initially determined that there is a cross license between S3G and NVIDIA. S3G believes this ruling is in error and has already filed a motion for the ITC Commissioners to review and change this ruling.
5.Apple's iPhone/iPad use PowerVR Texture Compression (“PVRTC”). S3G still believes that its patents cover PVRTC and has already filed a motion with the Commission to review and modify the initial determination.
 
S3G's ITC case against Apple and the USPTO's reexamination of the S3Gpatents are on-going, complex legal proceedings that involve complex technical issues that are not easily summarized or understood. Due to the limited availability of public information at this time and the complex nature of the technical and legal information, HTC cautions against relying on incomplete or unverified information.

6.Countermeasures:N/A

7.Any other matters that need to be specified:N/A