Samsung Antes Up for Android Patents
Microsoft said Wednesday it has struck a patent cross-licensing deal with Samsung Electronics regarding the phone maker's use of the Android smartphone operating system that is aimed at keeping the software giant from suing the Korean firm for patent infringement.
In a statement, Microsoft (NASDAQ: MSFT) said under the deal it will collect royalties for Samsungs mobile phones and tablets that use Google's (NASDAQ: GOOG) Android, which Microsoft claims infringes several patents it owns.
The deal is just the latest in a string of recent patent licensing agreements that Microsoft has signed with what had been up until now mostly smaller smartphone OEMs agreeing to pay royalties to the Redmond, Wash. company rather than confront Microsoft in court.
This is a particularly sensitive agreement for the two firms -- not only because Samsung is one of the largest smartphone manufacturers in the world, but also because, besides Android phones, the company also makes Windows Phone 7 devices.
For instance, in mid-September, AT&T Mobility announced that this fall it will ship three new Windows Phone "Mango" handsets, two of them built by Samsung.
In fact, Samsung was one of Microsoft's launch partners for Windows Phone last fall.
"Microsoft and Samsung see the opportunity for dramatic growth in Windows Phone and were investing to make that a reality, Andy Lees, president of Microsoft's Windows Phone Division, said in a statement heralding the patent deal this week.
The Samsung deal is the seventh that Microsoft has signed. The other six include Acer, General Dynamics Itronix, Onkyo, Velocity Micro, ViewSonic, and Wistron.
Wags have even joked that Microsoft is making more money from Android licensing than it does for Windows Phone, which has been slow to take off in the market to date.
Not every mobile phone OEM that Microsoft has approached so far has rolled over. A year ago this week, Microsoft sued Motorola Mobility, another major Android phone maker, for patent infringement.
"Together with the license agreement signed last year with HTC, today's agreement with Samsung means that the top two Android handset manufacturers in the United States have now acquired licenses to Microsofts patent portfolio ... These two companies together accounted for more than half of all Android phones sold in the U.S. over the past year," two of Microsoft's top attorneys said in a joint post to the Microsoft on the Issues blog Wednesday.
"That leaves Motorola Mobility, with which Microsoft is currently in litigation, as the only major Android smartphone manufacturer in the U.S. without a license," the post said.
In the meantime, it also remains to be seen whether Microsoft and Google will end up in court over Microsoft's claims, though angry words were exchanged regarding patent purchases by both parties recently.
Indeed, in mid-August, Google announced its intent to buy out Motorola Mobility for some $12.5 billion, although the deal has yet to receive regulatory approval.
A Google spokesperson reportedly compared the deal to "extortion."
So far, however, Microsoft's assertions from a year ago that Android, although open source, "isn't free," seem to be playing out in Microsofts favor.