Microsoft and LG Electronics have signed a patent-licensing agreement for the latter’s Google Android devices. Although neither company disclosed the exact terms, similar agreements have seen manufacturers paying Microsoft royalties for each Android device created. Microsoft has argued for some time that Android violates several of its patents.
The agreement with LG Electronics also covers Chrome OS, Google’s Web-reliant operating system for traditional PCs. A handful of “Chromebooks” appeared at this week’s 2012 International Consumer Electronics Show in Las Vegas. Whether LG ends up building these devices under their own brand remains to be seen, but the agreement indicates that such a move is at least under consideration.
“We are pleased to have built upon our longstanding relationship with LG to reach a mutually beneficial agreement,” Horacio Gutierrez, corporate vice president and deputy general counsel for Microsoft’s Intellectual Property Group, wrote in a Jan. 12 statement posted on Microsoft’s Website. “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.”
Frank Shaw, Microsoft’s corporate vice president of corporate communications, left a somewhat cheekier response to the news on his Twitter feed: “Hey Google-we are the 70%.”
Microsoft spent 2011 locking down Android agreements with manufacturers big and small, including Samsung and HTC. Thanks to that push, Microsoft is earning significant revenue from software developed by Google, a fact that almost certainly irritates Mountain View executives to the extreme.
Not all Android manufacturers have quietly submitted to a Microsoft license. Motorola Mobility, which Google is looking to acquire, voted to battle out the issue in court rather than pay Redmond a fee for its Android devices. Barnes & Noble, which manufactures a line of e-readers that use Android, also opted to push back against Microsoft’s licensing attempts with its own lawsuit.
The added irony to the situation is that Microsoft’s earnings from Android licenses could, theoretically, be outpacing revenue from Windows Phone, which so far has failed to attract a customer base capable of outright challenging Android’s market share. Microsoft hopes a recent software upgrade to Windows Phone, combined with new efforts by manufacturing partners like Nokia, will help it gain some marketplace traction this year.