Reports from CES 2012 indicate that Windows Phone 7 may be a competitive mobile platform, however Microsoft has decided to hedge its bets and continue making money from Android by signing a patent-licensing agreement with LG. The terms of the agreement will likely require LG to pay Microsoft royalties for all LG tablets, phones, and other consumer devices running the Android or Chrome OS platform. This deal likely mirrors Microsoft's ten previous patent-licensing agreements with Android and Chrome OS manufacturers, including Samsung, HTC, Acer, and ViewSonic.

By signing the recent agreement Microsoft is "pleased to have built upon [its] longstanding relationship with LG", a relationship which began in 2007, when LG sold its soul to Microsoft by signing a "broad patent-licensing agreement" covering "Linux-based embedded devices". The current agreement is apparently an extension of the earlier one as Android is based on Linux. I would be interested to know how LG feels about continuing its "mutually beneficial agreement" with Microsoft.

Although Microsoft earns royalties from a majority of Android devices sold in the US, they have continued to litigate against manufacturers who have not agreed to their terms, such as Barnes & Noble and Motorola. Indeed, Motorola, recently acquired by Google, is perhaps the last major Android device manufacturer not paying some type of royalty to Microsoft for the privilege of making smartphones and tablets. So, much for free and open.

Despite Apple's gratuitous stream of patent litigation suits against Android device manufacturers, the commercial reality is that patent-licensing arrangements are much favoured over litigation. In fact, according to Microsoft, an astounding 70% of all Android smartphones sold in the U.S. are covered under Microsoft's patent portfolio. It's hardly a surprise that Microsoft is making more money from Android than from its own Windows Phone.

Google has yet to issue a statement on the matter, but judging by its earlier comments, I doubt it will be pleased by LG's capitulation.

For more information on the patent agreement, check out Microsoft's press release below:

Microsoft and LG Sign Patent Agreement Covering Android and Chrome OS Based Devices

REDMOND, Wash. — Jan. 12, 2012— Microsoft Corp. and LG Electronics have signed a patent agreement that provides broad coverage under Microsoft’s patent portfolio for LG’s tablets, mobile phones and other consumer devices running the Android or Chrome OS Platform. The contents of the agreement have not been disclosed.

“We are pleased to have built upon our longstanding relationship with LG to reach a mutually beneficial agreement. Together with our 10 previous agreements with Android and Chrome OS device manufacturers, including HTC, Samsung and Acer, this agreement with LG means that more than 70 percent of all Android smartphones sold in the U.S. are now receiving coverage under Microsoft’s patent portfolio,” said Horacio Gutierrez, corporate vice president and deputy general counsel, Intellectual Property Group at Microsoft. “We are proud of the continued success of our program in resolving the IP issues surrounding Android and Chrome OS.”

Microsoft’s Commitment to Licensing Intellectual Property

The agreement with LG expands upon a pre-existing agreement, and it is another example of the important role IP plays in ensuring a healthy and vibrant IT ecosystem. Since Microsoft launched its IP licensing program in December 2003, the company has entered into more than 1,100 licensing agreements and continues to develop programs that make it possible for customers, partners and competitors to access its IP portfolio. The program was developed to open access to Microsoft’s significant R&D investments and its growing, broad patent and IP portfolio.

More information about Microsoft’s licensing programs is available athttp://www.microsoft.com/iplicensing/.

[Source: Microsoft via Engadget and FOSS Patents]

Abhiroop Basu
Abhiroop Basu is an opinionated tech and digital media blogger. As a doe-eyed twenty-something he started his first blog TechComet to comment on anything tech-related that caught his omniscient eye. Since then he has blogged for Android Police, Make Tech Easier, and This Green Machine. In the real world, Abhiroop Basu is a resident of Singapore and the Editor of The Digit, a subsidiary of The Potato Productions Group.

  • sgtguthrie

    Wow, I wish MOTOROLA would get their collective heads out of their asses, and make their phones easily unlockable like a NEXUS. I would much rather buy from a company that hasn't sold it's soul to Micro$oft, but refuse to own a device I can't have FULL control of! Please moto, take google's lead on this one!
    "fastboot oem unlock"

    • SiliconAddict

      *sighs* I wish fanbois would think before they post. These companies haven't sold their soul to MS. They have a gun pointed directly at their head and MS is saying sign or we will sue. At the end of the day this is Google's fault for not building up their patent portfolio earlier in the game. They now have nothing to protect their OEM's with, so the OEM's are instead settling. If it wasn't for the fact that Moto wireless is being bought out by Google. And that they have a huge patent portfolio to counter MS's BS with I'm betting MS would have already stolen Moto lunch money already.

      • sgtguthrie

        Fanbois? How the eff am I a fanboy? Could you explain?

        Micro$oft can't beat these companies in the market place, so they attempt it from the court room! Why improve your own product, when you can make money off someone else's? It's despicable in my opinion...

        The point I was making wasn't that it's the oem's fault, however I don't want to feed the beast (Micro$oft) directly, or indirectly! You shouldn't be so judgemental and quick to call ppl names... IT shows your true character as you hide behind that computer screen ;-)

  • ABT Benjamins

    How is this a surprise? The world economy runs on a more or less free enterprise system of capitalism. There is no place for open source in it, and any attempt towards the contrary results in abuse by capitalists. Tesla made the same mistake. The only reason android even stood a chance to begin with was because Google sources billions in revenue for thousands of corporations.

  • Hiram Lester

    At least Microsoft is willing to license the patents, which Apple does not seem to be interested in. Whether you agree with software patents or not, this is the way they're supposed to work. The owner licenses them out, protecting their intellectual property, while making money off their innovation and encouraging others to innovate. Unfortunately Apple's stance actually hurts innovation by shutting out all of the competition. :(

    • sgtguthrie

      Very true... I like how you said that. Bravo...