Microsoft has licensed some of its patents to mobile phone maker HTC for use on the company's Android-based smartphones. HTC will pay royalties for the patents, Microsoft said in a statement. An HTC representative declined to say how much the company will pay, citing a nondisclosure agreement with Microsoft.
Microsoft is also talking to several other vendors about its patent "concerns" related to Google's smartphone operating system, according to Horacio Gutierrez, deputy general counsel of intellectual property and licensing at Microsoft.
However, Microsoft isn't saying what technologies are covered by the patent deal or what its patent concerns are related to Android.
Microsoft has to ensure that competitors do not get a free ride on its innovations, Gutierrez said in a statement. The other makers of Android-based smartphones contacted by Microsoft are keeping their discussions under wraps.
Sony Ericsson Mobile Communications, which also makes phones based on Windows Mobile, has regular discussions with its partners, including Microsoft, but isn't commenting on what those discussions are about, according to Aldo Liguori, head of communications at Sony Ericsson.
Motorola and Samsung, which also sell Android smartphones, didn't return calls for a comment on the matter.
The fact that HTC, Samsung and Sony Ericsson also make Windows phones may make any discussions with Microsoft easier to resolve, according to Francisco Jeronimo, research manager at IDC. He said he wouldn't be surprised if the vendors can get discounts related to how they are going to push devices based on Windows Phone 7. Motorola could have a tougher time coming to an agreement with Microsoft since it dumped Windows Mobile in favor of Android, according to Jeronimo.
Patents have grown in importance as phones have become more advanced, according to Ben Wood, analyst at CCS Insight.
Companies unable to agree licensing deals often head to the courts. Recent clashes of this kind between phone manufacturers have pitted Apple against Nokia and Apple against HTC. Usually it is about the money: companies will license patents if the price is right, but just a fraction of a percentage point difference in royalties can mean a lot of money when a billion phones are sold annually, according Wood.
One company pursuing a different strategy is Apple, Wood said: rather than license its patents to generate a revenue stream, it uses them to differentiate its products from the competition.