14 DAY TRIAL // Per a new intellectual property agreement inked between Microsoft and HTC, the Taiwanese phone manufacturer will pay royalties to the Redmond software giant for the devices running Google Android. The patent deal is designed to provide HTC with broad coverage for all its Android mobile phones under Microsoft’s patent portfolio. In the Redmond company’s perspective, the new patent license agreement penned with HTC is just a small step in the evolution of the smartphone market.
“Many technology companies active in the growing smartphone space have been taking increasing steps to protect their inventions. As the two companies have a long history of technical and commercial collaboration, Microsoft views this agreement as an effective example of how industry leaders can reach commercially reasonable arrangements that address intellectual property concerns,” a Microsoft spokesperson told Softpedia.
In mid-March 2010, Horacio Gutierrez, corporate vice president and deputy general counsel, commenting on the Apple vs. HTC lawsuit, said, “The smartphone market is still in a nascent state; much innovation still lies ahead in this field. In all nascent technology markets, there is a period early where IP rights will be sorted out.”
“In the next few years, as the IP situation settles in this space and licensing takes off, we will see the patent royalties applicable to the smartphone software stack settle at a level that reflects the increasing importance software has as a portion of the overall value of the device. In the interim, though, we should expect continued activity. Apple v. HTC was not the beginning of this process, and it isn’t the end of the story either,” he added at the time.
In relation to the new Microsoft and HTC patent agreement, Gutierrez made it clear that the Redmond company was working to protect its intellectual property. Essentially, Microsoft is pointing at Android and indicating that the mobile OS from Google is infringing on its intellectual property. Gutierrez mentioned that HTC was not the sole company that Microsoft approached in regard to Android.
“Microsoft has a decades-long record of investment in software platforms. As a result, we have built a significant patent portfolio in this field, and we have a responsibility to our customers, partners, and shareholders to ensure that competitors do not free ride on our innovations. We have also consistently taken a proactive approach to licensing to resolve IP infringement by other companies, and have been talking with several device manufacturers to address our concerns relative to the Android mobile platform,” he said. “Competitors do not get a free ride on our innovations.”
Earlier this year, Apple filed a lawsuit against HTC, with a focus on Android devices as well, also claiming intellectual property infringement. Google has yet to take a stand against either Microsoft or Apple in terms of the IP violation allegations from the two companies, or to attempt to protect partners that have embraced Android.
But could the IP lawsuit from Apple and the patent deal with Microsoft be signs that using Google’s Android operating system is an intellectual property liability? A “warning” to all device manufacturers that integrating Android into their devices would give the green light to patent lawsuits against them?
Microsoft has not specified the patents that HTC has licensed, or any details of the agreement, including the financial terms, for that matter. Indications exist that the Redmond company’s claims for IP violation go deeper than Google and Android, to Linux, on which the Mountain View-based search giant built its mobile platform.