Microsoft Gets Paid For Android

By striking a patent licensing deal with HTC, Microsoft is raising the cost of using Google's free Android operating system.
In a move likely to strengthen HTC's legal position as it defends against the patent lawsuit filed last month by Apple and to cloud the future of Google's Android operating system, Microsoft on Tuesday said that it has signed an agreement with HTC to license its patent portfolio for HTC's Android-based phones.

"HTC and Microsoft have a long history of technical and commercial collaboration, and today's agreement is an example of how industry leaders can reach commercial arrangements that address intellectual property," said Microsoft VP and deputy general counsel Horacio Gutierrez, in a statement. "We are pleased to continue our collaboration with HTC."

Microsoft introduced its intellectual property licensing program in December 2003 and since then has signed over 600 agreements that allow competitors and partners to utilize the company's technology.

The deal calls for HTC to pay royalties for its phones running Android.

Microsoft in an e-mailed statement confirmed that it is in licensing talks with other device makers that distribute Android.

"Microsoft has a decades-long record of investment in software platforms," said Gutierrez. "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."

Google declined to comment.

The agreement with Microsoft also may provide HTC with an ally in its defense against Apple.

Apple, in a recent legal filing in its litigation against HTC, acknowledged that its claim "appears to accuse" Qualcomm and Microsoft of infringement.

While not explicitly making such a claim in its motion to move the case from Delaware to California, Apple cites proximity to Google, Microsoft, and Qualcomm as a reason for its requested change of venue.

It remains to be seen however whose side Microsoft is on.

Apple and Microsoft have licensed patents to each other, so it's possible that the two companies could close ranks against Google -- the real target of Apple's lawsuit against HTC -- to blunt adoption of Android by mobile device makers and electronics manufacturers.

Indeed, Gutierrez in an online post last month, suggested that the patent sabre-rattling heard in the Linux arena would continue in the mobile market.

"In the next few years, as the IP situation settles in this space and licensing takes off, we will see the patent royalties applicable to the smartphone software stack settle at a level that reflects the increasing importance software has as a portion of the overall value of the device," he wrote. "In the interim, though, we should expect continued activity. Apple v. HTC was not the beginning of this process, and it isn't the end of the story either."