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2/22/2010
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Microsoft, Amazon Sign Patent License Deal

Amazon.com, a large commercial user of Linux, and Microsoft have signed a cross-licensing patent agreement.

Microsoft and Amazon.com have signed a patent cross licensing agreement in which Amazon.com will pay Microsoft an undisclosed amount of money, Microsoft announced late Monday.

"The agreement includes coverage for Amazon's popular e-reading device, Kindle, which employs both open source and Amazon's proprietary software components, and Amazon's user of Linux-based servers," according to a statement issued by Horacio Gutierrez, corporate vice president and deputy general counsel for intellectual property at Microsoft.

The brief statement left more questions than answers. For starters, it didn't indicate why the two parties entered an agreement at this time. Amazon.com has been using Linux servers since its inception and over the last three years, as the basis for its Amazon Web Services Elastic Compute Cloud infrastructure. Amazon's EC2 also offers the option of customers activating a Windows Server.

"We are pleased to have entered into this patent license agreement with Amazon.com," Gutierrez said. "Microsoft's patent portfolio is the largest and strongest in the software industry, and this agreement demonstrates our mutual respect for intellectual property as well as our ability to reach pragmatic solutions to IP issues, regardless of whether proprietary or open source software is involved," he said.

Such statements can be difficult to assess. Microsoft made large gains in applying for and receiving patents in the 2009, getting 2,906, an increase of 43% over the year before. But it still trailed IBM, consistently one of the largest patent applicants in the world, which received 4,914 patents in 2009, an increase of 17%.

IBM was in the top position; Microsoft was third among applicants to the U.S. Patent Office. In between was Samsung Electronics Co. Ltd. of Korea with 3,611, according to IFI Patent Analysis, a unit of Wolters Kluwer, an information services company in Amsterdam, the Netherlands.

The high profile agreement, however, will raise anew questions over whether Amazon.com felt it needed a safeguard as a prominent supplier of services based on Linux or whether the agreement was based on other factors. Either way, the pact gave Microsoft an opportunity to shine the spotlight on its patent portfolio.

It listed signers of previous IP agreements as: Apple, HP, LG Electronics, Nikon Corp., Novell Inc., Hoya Corp. Pentax Imaging systems Division, Pioneer Corp., Samsung Electronics Co. Ltd. and Fuji Xerox Co. Ltd.

Since it launched is IP licensing program in 2003, Microsoft has signed 600 licensing agreements with other companies across its patent portfolio, it said in the announcement. Companies with which it has signed Linux-specific agreements are: Novell, Samsung Electronics, Fuji Xerox, Buffalo Melco, Brother and LGE.

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