This afternoon, Microsoft issued a second statement that shines a bright light on what's happening here. Horacio Gutierrez, corporate vice president and deputy general counsel of Intellectual Property and Licensing at Microsoft, said:
In other words, Microsoft is coyly saying that if HTC hadn't agreed to this patent deal, it would have sued the company for patent infringement.
Microsoft has a decades-long record of investment in software platforms. As a result, we have built a significant patent portfolio in this field, and we have a responsibility to our customers, partners, and shareholders to ensure that competitors do not free ride on our innovations. We have also consistently taken a proactive approach to licensing to resolve IP infringement by other companies, and have been talking with several device manufacturers to address our concerns relative to the Android mobile platform.
Microsoft doesn't come right out and say it, but I'd bet the company is actively pursuing similar licensing agreements with every other company that makes Android handsets. What I really want to know is, where is Google in all this? Google is the company that developed and distributes Android. Are Microsoft and Google still hashing things out behind closed doors, or is a major lawsuit on the way?
If HTC knew it was standing on solid ground, it would have told Microsoft to stuff it. It didn't. Microsoft and HTC need one another. HTC is one of the biggest licensers of Microsoft's Windows Mobile software. Microsoft can't afford to lose HTC as a paying customer, and HTC can't lose the opportunity to sell Windows Mobile devices.
Long story short, the two companies had to strike a deal on this issue, lest all-out war break out between smartphone makers.