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Summary:

Microsoft has inked a licensing agreement with HTC for its mobile phone patents that gives HTC access to “broad coverage” under Redmond’s portfolio. It comes in the shadow of Apple suing HTC for patent infringement, a move widely believed to be aimed at Google and Android.

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Microsoft has announced a licensing agreement with HTC for its mobile phone patents that gives HTC access to “broad coverage” under Microsoft’s patent portfolio. HTC will pay Microsoft royalties for the Android phones it sells. This agreement comes in the shadow of Apple suing HTC for patent infringement, a move widely believed to be aimed at Google and Android. Analysts are already stating that this deal between HTC and Microsoft is aimed at defusing the Apple suit, but a statement by the Microsoft legal team implies it’s merely HTC avoiding a similar infringement claim by Redmond.

No details have been provided by Microsoft nor HTC as to which technologies are covered under this agreement. A look at Microsoft’s IP licensing program sheds some light as to the likely ones:

  • Exchange ActiveSync: HTC was the first Android phone maker including full support for interacting with Exchange Servers. This is almost certainly included in this licensing deal.
  • ClearType: Technology yielding crisper display of text on LCD screens.

There are no doubt many other patented technologies that are included under the HTC/Microsoft agreement, given the “broad coverage” claimed by both companies.

The statement by Microsoft that Android was infringing on its patents, and the subsequent deal with HTC, may spell big trouble for Google and the platform. Other Android phone makers now must make a determination if handsets produced likely infringe on either Microsoft or Apple technology. This may turn the semi-open platform into one as full of potential holes as Swiss cheese.

  1. Although the details of which patents weren’t publicly announced, the Exchange ActiveSync one is interesting by itself. HTC might just now be covered as far licensing ActiveSync, but Google has been since February of 2009, when they became a licensee.

    So prior to today, if HTC makes a Google Android phone and includes Exchange ActiveSync, would it be covered or not? Google had a licensing deal in that case and HTC presumably did not. The point being – will every phone contractor and sub-contractor be required to be a licensee of certain technologies in the future? Interesting to think about…

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    1. If that is the case, wouldn’t this agreement be for the HTC’s implementation of Exchange client prior to Google’s implementation?

      HTC provided Exchange support with Hero (Android 1.5) and if I am not mistakend, Google introduced it either with 2.0 or 2.1.

      I am not sure if the recent implementations in Desire and Incredible are Google’s or HTC’s. However, I would be surprised, if HTC implemented Exchange support by reverse engineering as opposed to licensing. Originally it was announced as a differentiating feature for Hero and licensing of Exchange technology isn’t similar to some other questionable patents where you are not sure if you are infringing or not.

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    2. I suspect this is all going to get very interesting. HTC licensed Exchange via WinMo for years, but that might not cover Android phones.

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    3. @Kevin
      Most likely, the license only covered the built-in email client built by Google. That client is absent in the Desire ROM I have on my Nexus One, so I’m guessing HTC didn’t want to or couldn’t license it. I don’t think Google’s license would cover any software written for Android.

      @James
      The ActiveSync license is probably bundled with the WinMo license in some way.

      I really love this dig by MS at Apple:
      “HTC and Microsoft have a long history of technical and commercial collaboration, and today’s agreement is an example of how industry leaders can reach commercial arrangements that address intellectual property,” said Horacio Gutierrez, corporate vice president and deputy general counsel of Intellectual Property and Licensing at Microsoft.

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  2. Microsoft is brilliant. Why didn’t Palm think of this?

    1) Your phone isn’t selling (Windows Mobile is a disaster right now).
    2) You have a patent portfolio everyone seems to think is killer.
    3) Of course, if your patent portfolio were really “killer” you’d go after the big infringers on your own. Hopefully no one notices MS hasn’t done this.
    4) Instead, you scare a smaller fish. Meet him in a back alley and say “Pssst, want to license our patents? No, we won’t argue about them, but ‘everyone knows’ they’re killer, and believe me you’re violating them”.
    5) Smaller fish buys into the “killer” theory and licenses a portfolio that may actually be worth very little.
    6) Microsoft gets money for HTC phones sold, and doesn’t have to mess with a dirty patent suit they’re likely convinced they can’t win anyway.
    7) Once you get one fish on board, you go after others. All without having to prove the portfolio is even worth anything.

    It’s brilliant on Microsoft’s part. For HTC, it’s probably a mistake. Maybe Palm will license their patents to HTC next.

    And, yes, I’m sure there’s something in the MS portfolio broad enough to potentially bring a case against Apple. But that’s not the ultimate goal, and now what smart companies do. You bring a case with a reasonable belief you can “win” it, not just blow millions to eventually get nothing in return. MS apparently didn’t believe they could do the former, and has no issue with HTC doing the latter.

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  3. “Other Android phone makers now must make a determination if handsets produced likely infringe on either Microsoft or Apple technology. This may turn the semi-open platform into one as full of potential holes as Swiss cheese.”

    or how about HTC & other manufactures tell MS to F-off & start making their own hardware? MS is MUCH more dependent on the manufactures than the manufactures are dependent on them. MS has become an afterthought in every space but the desktop & the way things are going that isnt too far away either.

    you know what they say, when companies start suing over patents or striking licensing deals its because they are sensing their upcoming irrelevancy. in these latest lawsuits MS is being reactive while Apple is being proactive, but theres no question both companies have tremendous fear of Google.

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  4. Seems like Apple should really just work it out already with HTC, like Microsoft did with HTC, instead of Apple fighting it out with HTC. But Apple being an acerbic kind of a company, doubt it. Companies can work it out with each other, rather than being North Korean jerks

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  5. I see this more as a defensive play on Microsoft’s part then as a path to future litigation.

    One thing that’s important when you own a patent is that you defend it. If Microsoft took Apple to court over a patent and Apple could show that Microsoft-partner HTC had been using technology cover by the patent as well sans-license, while it wouldn’t exactly let Apple of the hook, it would make a large difference in any judgment. In the context of the current litigious environment, Microsoft made a smart move having HTC license its technology.

    Trying to project what effect this will have on Google or Apple is difficult, and ironically, Google may be in the best position. With a still relatively open platform, Google may be content to sit back and let any hole that Microsoft is able to create filled by the Android fan base. Microsoft would be reduced to playing whack-a-mole.

    My guess is in the end Microsoft will license key technologies like to Google if more than anything to keep their corporate customers happy.

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