The decision comes as the legal battle between Apple and Samsung continues to intensify, resulting in massive settlements and with Apple being ordered by the UK courts to run apology ads.
Meanwhile, HTC is becoming a less of a threat to Apple's dominance of the smartphone market. The Taiwan-based company's profits for the three months to the end of September crashed 79% year on year.
Losing a patent dispute can result in massive liabilities for the losing side, as evidenced by Samsung being ordered by a US court to pay Apple $1bn (£630m) for infringing its patents.
The terms of the licensing agreement between Apple and HTC are confidential, but extend to current and future patents held by both companies.
Peter Chou, HTC chief executive, welcomed the licence agreement and said it would allow the company to "focus on innovation instead of litigation", while Apple boss Tim Cook also claimed the agreement would allow the company "to stay laser-focused on product innovation".
Apple and HTC were fighting more than 20 patent cases across the globe since their first legal clashes in March 2010, according to news agency AFP.