New agreement means Redmond now gets revenue from 70% of all Google-based smartphones sold in the U.S.
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Microsoft said Thursday that it has reached a deal with LG under which the South Korean electronics manufacturer will pay license fees in exchange for Microsoft's pledge not to sue it for using Google's Android and Chrome OS software in its products.
Financial details of the agreement were not revealed. Microsoft has long maintained that certain components of Android and Chrome OS violate its patents, and has struck licensing deals with numerous vendors that use the Google mobile and desktop software in their gadgets.
"We are pleased to have built upon our longstanding relationship with LG to reach a mutually beneficial agreement," said Microsoft deputy general counsel Horacio Gutierrez, in a statement.
Microsoft said the deal with LG means that 70% of Android-based smartphones sold in the U.S. are now covered by its licensing program. "We are proud of the continued success of our program in resolving the IP issues surrounding Android and Chrome OS," said Gutierrez.
Microsoft launched its IP licensing program in 2003, and to date has struck more than 1,100 deals. Other companies that are paying Microsoft for the right to use Android or Chrome in their products without fear of a lawsuit from Redmond include HTC, Samsung, and Acer.
Microsoft has also sought licensing deals from vendors whose products run Linux, which the software maker also claims violates its patents.
Critics have charged that the program stifles competition and innovation and raises prices by forcing companies to choose between a licensing deal or the possibility of an expensive, lengthy legal battle with one of the tech industry's richest companies.
Microsoft does not disclose how much revenue it's obtaining from Android, Chrome, and Linux licenses, but some analysts believe it may be substantial, to the point where the company is making significant profits from the mobile revolution even though its own offering, Windows Phone, commands a market share of less than 2%, according to Gartner.
Google, for its part, isn't standing still. The search giant in August said it would pay $12.5 billion to acquire Motorola Mobility, which manufacturers Android-powered handsets, and which Microsoft has sued for patent violations. Beyond giving Google its own smartphone manufacturing capacity, the deal also gives it access to Motorola's trove of more than 24,000 patents.
Some observers believe that if Microsoft ever sues Google directly, the latter will use those patents as the basis for a countersuit.
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