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Microsoft Gets Android Phone Makers To Pay Up

Compal pact means Redmond now has IP deals in place with more than half the world’s Android smartphone and tablet manufacturers.
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Microsoft said Sunday that it has struck another licensing deal under which it will receive royalty fees from a manufacturer of devices that run Google Android and Chrome software, which Redmond claims violate its patents.

The agreement covers smartphones, tablets, and other devices that Taiwan-based Compal, known in industry parlance as an original design manufacturer (ODM), produces for a number of third parties.

"Today's agreement with Compal means more than half of the world's ODM industry for Android and Chrome devices is now under license to Microsoft's patent portfolio," said Microsoft deputy general counsel Horacio Gutierrez, in a statement.

Earlier this year, Microsoft struck similar agreements with ODMs Wistron and Quanta Computer.

[Learn about which new Android features Google copied from its competition. Read Android 4.0 Ice Cream Sandwich: Brilliant Thievery?]

The software maker has also inked Android and Chrome-related licensing pacts from numerous original equipment manufacturers (OEMs) that offer Google-powered devices under their own brands, including HTC, Acer, and ViewSonic. The company claims it now has licensing deals in place with more than half the ODMs and OEMs in the Android market.

Microsoft claims both the Android mobile OS and Chrome, which runs netbooks and laptops, step on certain Windows patents. But rather than attack Google directly, Redmond appears to be conducting an intellectual property campaign against its rival through proxies.

Microsoft officials say they are simply protecting the billions of dollars that the company has poured into IP development over the years.

"Amid continuing clamor about uncertainty and litigation relating to smartphone patents, we're putting in place a series of agreements that are reasonable and fair to both sides," said Gutierrez and Microsoft general counsel Brad Smith, in a jointly authored blog post. "Our agreements ensure respect and reasonable compensation for Microsoft's inventions and patent portfolio."

Microsoft has not disclosed how much revenue it has received from its Android and Chrome licensing programs, but some analysts believe it is substantial and helps ensure that the company will profit from the smartphone revolution even if its own efforts around Windows Phone continue to lag.

With a share of less than 6%, Windows mobile platforms badly trail market leader Android and second place Apple's iOS in the U.S. market.

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.

Many observers believe that if Microsoft ever sues Google directly, the latter will use those patents as the basis for a countersuit.