The U.S. International Trade Commission ruled Monday that Apple did not violate patents held by S3 Graphics, a software company purchased by HTC in July for $300 million.
The trade body, which has the power to block imports of products that infringe on intellectual property rights, said in its ruling that it found "no violation" from Apple and that "the investigation is terminated."
S3 Graphics filed a complaint against Apple in 2010 alleging that the electronics giant was using its patented imaging technology without permission, infringing on four of its patents.
In July of this year, an ITC administrative law judge found that Apple had violated two of S3 Graphics patents on image compression, but the commission decided in September to review the ruling.
The commission's latest decision reverses the earlier ruling and clears Apple of all charges.
Neither Apple nor HTC could be immediately reached for comment.
S3 Graphics' court loss casts doubt over HTC's decision to buy the company from Via Technologies and WTI Investment International.
HTC bought S3 Graphics mainly for its intellectual property portfolio of 235 patents and pending patent applications. The handset manufacturer had planned to use S3 Graphics' patents for ammunition in its court battles with Apple over smartphones using Google's Android operating system.
HTC and Apple are suing each other on a number of fronts, including U.S. District Court and the ITC.
There have been a flood of patent lawsuits against manufacturers of Android-based smartphones and tablets. The litigation could force Android manufacturers into costly licensing deals with rival electronics makers.
The ongoing legal challenges over Android were a driving force behind Google's $12.5 billion buyout of Motorola Mobility, which owns about 17,000 patents. Motorola Mobility's shareholders voted to approve the deal last week.