Microsoft Strikes Phone Patent Deal With HTC. Should Google be Worried?

By  |  Tuesday, April 27, 2010 at 11:58 pm

Finally, news about smartphones and patents that doesn’t involve large companies suing each other: Microsoft has announced that it’s signed a patent licensing agreement with HTC covering the latter company’s Android smartphones. HTC gets to build Android phones without fear of patent trouble with Microsoft; Microsoft gets to collect a royalty on every Android handset HTC sells. Which is quite an accomplishment given that the company behind Android–Google–doesn’t charge handset manufacturers royalties.

Microsoft would presumably rather be collecting royalties on Windows phones–before it went gaga for Android, HTC was best known as the dominant maker of Windows Mobile devices–but a peaceful relationship between the two companies benefits both parties. (If HTC isn’t among the first companies to jump on the Windows Phone 7 bandwagon, it’ll be very surprising.)

The Microsoft press release doesn’t say anything in specific about the patents involved, but Microsoft has plenty of them covering phone-related technology.

If HTC requires a license to make Android phones without violating Microsoft’s intellectual property, what does that mean for Motorola, Samsung, LG, and all the other companies that make Android handsets? Stay tuned for news of further deals, I guess. Or lawsuits.Either way, it’s also hard to interpret the arrangement with HTC as anything other than an oblique shot across Google’s bow. (Here’s a Cnet story by Ina Fried on all this with a sound bite from Microsoft’s deputy general counsel that makes the shot slightly less oblique.)

Then again, it’s also hard to imagine that it would be in Microsoft’s best interest to sue large phone companies who are logical licensees for Windows Phone 7. Unlike Apple–which is in court with both HTC and Nokia–Microsoft’s business model requires decent relationships with the rest of the industry.

 
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11 Comments For This Post

  1. IcyFog Says:

    Well this deal solidifies it. There’s no way I will buy an HTC phone now.

  2. RBSplat Says:

    Your loss.

  3. noop Says:

    Pay money to Microsoft for NOT using their slow and buggy OS? No, thanks.

  4. Len Feldman Says:

    It’s very common for companies who want to license patents or other intellectual property to strike a “sweetheart” deal with the first (or first few) licensees in order to set a precedent and build momentum. I wouldn’t be surprised if HTC’s royalty rate is in the range of a few pennies per Android phone, and HTC’s licensing fee to use Windows Mobile and Windows Phone has been cut by an equivalent amount.

  5. Bouke Timbermont Says:

    …so basically Microsoft I saying “We stand behind our own product so much we are making money from you choosing the competition”… Well isn’t that great advertisement for Windows Phone 7 :p

  6. Josh Says:

    I agree with IcyFog. I was considering an HTC Incredible, but I will take tyranny from Apple over tyranny from Microsoft any day.

  7. Tom B Says:

    Three thoughts.

    1) I wonder what IP MSFT believes it owns, on an Android phone?

    2) Probably nothing. MSFT has a history of threatening lawsuts for non-existent IP to extort money. They tried this on the LINUX community. I don’t recall what happened. I think the LINUX people told them to “take a walk”.

    3) Google must feel like the husband in “Indecent Proposal” (except MSFT gets the money…).

    This is the bad karma the brain-damaged Mr. Schmidt has brought on himself. He betrayed Apple– on whose board he was sitting– when Goog launched Android. He betrayed customers, who might be lead to believe from the “Droid does” commercials that, well, that “Droid does”. And now, HTC (clearly a “dumb blond”) is sleeping with the true killer of openness, progress, innovation, and quality in the industry, MSFT.

  8. Sean Says:

    Google is not worried, nor do they need to be

  9. chr0n0 Says:

    I think that Bouke has a point. HTC makes the hardware that Win Mobile runs on, so they don’t want to bicker, but would also like HTC to know the enemy; so to speak. Google thrown into the mix too? Strange bedfellows, indeed. Seems to me like some kind of trist against Apple.

  10. Scott Dunn Says:

    Microsoft, I’d like to introduce to you my friend and longtime ally, RICO. RICO will help you to find your sense of ethics once more by forcing you to reveal the terms of your agreements that place your “linux” licenses in violation of the GPL. Like IP Innovations, you don’t make products any better, but you sure like to make them more expensive.

  11. Chris Says:

    Google will continue to domainate the market but well see what happens when Yahoo and MS merge in a couple of months.

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