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Microsoft announced another big Android patent-licensing agreement just a week after announcing that it had inked a similar deal with Hon Hai, parent company of Foxconn, the world’s largest contract manufacturer.
Late in the day on April 23, the Windows software maker revealed that ZTE, the Chinese telecommunications equipment provider and a producer of smartphones, had signed a licensing deal concerning patents pertaining to Android and Chrome OS. The deal covers “ZTE phones, tablets, computers and other devices” that run the affected software, according to a company blog post by Horacio Gutierrez, corporate vice president and deputy general counsel for Microsoft legal and corporate affairs.
Twice in as many weeks, Microsoft notched another big licensing deal. Gutierrez wrote that the company was “pleased to announce that ZTE, one of the world’s largest smartphone companies, has joined a long list of companies that have signed patent-license agreements with Microsoft.” It’s a list that includes Samsung, LG, HTC, Acer, Barnes & Noble, and Nikon.
While eclipsed by market leaders like Apple and Samsung, ZTE has been steadily making inroads in the competitive smartphone and tablet markets.
Last year, the company made waves by placing fourth in Gartner’s smartphone market rankings on the strength of its low-cost offerings. On Feb. 15, 2012, the research group singled out as ZTE one of the fastest-growing handset makers after more than doubling phone shipments in the fourth quarter of 2011 compared with the same period during the previous year.
However, the company ran into a couple of rough patches as 2012 winded down.
On Oct. 8, IT networking titan Cisco severed its partnership with ZTE amid claims that the latter was selling Cisco equipment to Iran, a violation of sanctions imposed by the U.S. After mounting losses and just shy of the New Year, the struggling company accepted a multibillion dollar loan from the Chinese government. It was revealed in a Dec. 20 report that China Development Bank extended a five-year, $20 billion credit to ZTE.
For Microsoft, ZTE stands as a high-profile partner.
“The ZTE and Foxconn agreements show once more that technology companies around the world, including some of the world’s largest and fastest-growing manufacturers anchored in China, recognize licensing is an effective way to share technology and build on each other’s work, accelerating the pace of innovation and delighting customers,” blogged Gutierrez.
Gutierrez also remarked on the patent wars that are gripping the mobile device industry, and many would argue, are stifling innovation. “Much of the current litigation in the so-called ‘smartphone patent wars’ could be avoided if companies were willing to recognize the value of others’ creations in a way that is fair,” he wrote.
Describing intellectual-property rights as a “two-way street,” Gutierrez noted that Microsoft has paid more than $4 billion during the past decade in fees pertaining to the IP of others.