Microsoft's Android Royalty Strategy Targets General Dynamics Itronix

Microsoft has reached an agreement with General Dynamics Itronix for royalties on the latter's Android devices, continuing its long-held Android royalty strategy.

Microsoft has reached an agreement with General Dynamics Itronix for royalty payments on the latter's Android-based products.

Microsoft claims that the Android platform infringes on a number of Microsoft-held patents. For several quarters, the company has pursued a stark strategy with regard to manufacturers of Android devices such as smartphones and tablets: enter into a royalty-payment agreement, or face a lawsuit. General Dynamics Itronix chose the former option, although both companies remain silent about the actual financial terms of the deal.

"We are pleased to have reached this agreement with General Dynamics Itronix, which is an example of how industry leaders address intellectual property," Horacio Gutierrez, corporate vice president and deputy general counsel of Intellectual Property and Licensing at Microsoft, wrote in a June 27 statement.

Other big companies have entered into similar royalty agreement with Redmond. In April 2010, HTC announced that it had agreed to pay Microsoft royalties in exchange for the use of "patented technology" in its Android-powered phones. In the wake of that, rumors circulated that Microsoft was in the process of negotiating intellectual property agreements with several other unnamed companies.

However, not all manufacturers of Android devices seem willing to pay Microsoft royalties without a legal battle. Barnes & Noble, whose Nook e-reader uses Android, filed a counter-suit against Microsoft after the latter sued it for patent infringement.

The bookseller's counterclaim, filed April 25 with the U.S. District Court for the Western District of Washington at Seattle, described Microsoft as repeatedly arguing that its patent portfolio would "entirely preclude the use of Android Operating System by the Nook," and mentions that both HTC and Amazon have entered into patent-licensing deals with Redmond.

"Microsoft is misusing these patents as part of a scheme to try to eliminate or marginalize the competition to its own Windows Phone 7 mobile device operating system posed by the open source Android operating system and other open source operating systems," it read at one point. "Microsoft's conduct directly harms both competition for and consumers of eReaders, smartphones, tablet computers and other mobile electronic devices, and renders Microsoft's patents unenforceable."

Elsewhere in the filing, Barnes & Noble also raised the specter of Microsoft engaging in anticompetitive practices.

"Microsoft's activities have a significant, wide-felt, and highly detrimental anticompetitive effect and restrain competition in the market for mobile operating systems," it claimed, "by suppressing the use and development of open source mobile operating systems, including the Android operating system, and the development of applications and devices employing the same."

Terms like "anticompetitive," of course, are regarded as sore points for Microsoft, which spent a significant chunk of the 1990s embroiled in a monopoly dispute with the U.S. Department of Justice. The case eventually forced Microsoft to make significant concessions.

In October 2010, Microsoft sued Motorola for allegedly violating nine patents with its Android smartphones. "The patents at issue relate to a range of functionality embodied in Motorola's Android smartphone devices that are essential to the smartphone experience," Gutierrez wrote in an Oct. 1 statement. Motorola later retaliated with an intellectual-property complaint of its own.

The Android lawsuits also suggest that Microsoft is continuing its traditionally aggressive stance with regard to patents and open source. Android relies on a Linux kernel for core system services such as security, memory and process management, and network stack.

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