Just like one week ago (when Foxconn parent Hon Hai took a royalty-bearing Android and Chrome patent license from Microsoft), there's major smartphone patent news out of Asia: Microsoft has announced on its corporate blog a license agreement with ZTE covering Android and Chrome devices. Numerous device makers (including Samsung, HTC, LG and Acer) as well as contract manufacturers have previously taken such a license from Microsoft. Reuters just reported on this agreement and mentions that ZTE "has agreed to pay Microsoft Corp a royalty for devices it makes using Google Inc's Android and Chrome operating systems".
According to the author of Microsoft's statement, Corporate Vice President and Deputy General Counsel Horacio Gutierrez, "80 percent of Android smartphones sold in the U.S. and a majority of those sold worldwide are covered under agreements with Microsoft", but there are still a few holdouts:
"We have worked for multiple years to reach an amicable solution with the few global companies who have yet to take a license, but so far they have been unwilling to address these issues in a fair manner. We'd prefer to consider these companies licensing partners and remain hopeful they can join the rest of the industry in the near future."
Given that the post also notes that "[m]uch of the current litigation in the so called 'smartphone patent wars' could be avoided if companies were willing to recognize the value of others' creations in a way that is fair", this sounds a little bit like a last boarding call for those who expect a free ride -- such as Google's Motorola Mobility, which prefers litigation even though it's a grossly unsuccessful strategy for Google (it's not working against Apple either). That's just my interpretation (all I know about that corporate blog post is what it says).
Last week, Google's executive chairman Eric Schmidt announced 1.5 million Android device activations per day and predicted that one billion Android devices would be in use by the end of the year. The fact that more than 80% of U.S. android devices sales and more than 50% of worldwide sales are covered by patent agreements with Microsoft has already won Microsoft's intellectual property group an award from Managing Intellectual Property Magazine for the "Best Licensing Team". At the bottom of the ManagingIP article I just linked to there's a box titled "A Winner's Reaction" quoting a Microsoft in-house lawyer, Associate General Counsel Matthew Penarczyk, on why licensing is so important not only to Microsoft but to the industry at large:
"Our licensing strategy is robust because it directly correlates to robust innovation. Licensing shortens development cycles and increases focus on bringing innovation to customers faster. Licensing is a collaborative approach and it shows what can be achieved when companies sit down and address IP in a responsible manner. When companies can do that and engage and collaborate, they can make contributions to the global market, to consumers, to technology quickly. This is why Microsoft has really emphasized building a licensing program that matches our R&D efforts."
So far I haven't really seen any compelling argument from Google why litigation should be preferred over licensing. Google tells Android OEMs that it built those products, but it's been unable to dissuade 20 companies from signing license agreements with Microsoft.
The Microsoft-ZTE patent license agreement is already the 21st announced Android patent license deal (there may very well be other deals that were struck but not announced). This means 20 different companies (HTC appears twice on the list for its agreements with Microsoft and Apple) have taken third-party Android patent licenses. Here's my updated chronological list of all announcements to date:
April 27, 2010: Microsoft Announces Patent Agreement With HTC
June 27, 2011: Microsoft and General Dynamics Itronix Sign Patent Agreement ("Agreement will cover General Dynamics Itronix devices running the Android platform.") (FOSS Patents coverage)
September 28, 2011: Microsoft and Samsung Broaden Smartphone Partnership ("Under the terms of the agreement, Microsoft will receive royalties for Samsung's mobile phones and tablets running the Android mobile platform.") (FOSS Patents coverage)
April 30, 2012: Barnes & Noble and Microsoft Form Strategic Partnership to Advance World-Class Digital Reading Experiences for Consumers" ("Barnes & Noble and Microsoft have settled their patent litigation, and moving forward, Barnes & Noble and Newco will have a royalty-bearing license under Microsoft's patents for its NOOK eReader and Tablet products.") (FOSS Patents coverage)
July 9, 2012: Microsoft and Coby Electronics Sign Patent Agreement Covering Android and Chrome Based Devices ("Although the contents of the agreement have not been disclosed, the parties indicate that Microsoft will receive royalties from Coby under the agreement.")
November 7, 2012: Microsoft Signs Licensing Agreements for exFAT With Sharp, Sigma, NextoDi, Black Magic and Atomos Global ("The agreements cover Sharp Android tablets, Sigma and NextoDi high-end cameras and accessories, and Black Magic and Atomos Global broadcast-quality video-recording devices.")
- December 11, 2012: Microsoft and Hoeft & Wessel AG Sign Patent Agreement ("Agreement will cover Hoeft & Wessel devices running the Android platform.") (FOSS Patents coverage)
April 16 (U.S.)/17 (Asia/Europe), 2013: Microsoft and Foxconn Parent Hon Hai Sign Patent Agreement For Android and Chrome Devices ("Agreement provides broad coverage under Microsoft's patent portfolio to manufacturer of more than 40 percent of the world's consumer electronics.") (FOSS Patents coverage)
April 23 (U.S.)/24 (Asia/Europe), 2013: With ZTE, Most Major Android Makers Choose Licensing ("Under the agreement, Microsoft grants ZTE a license to Microsoft’s worldwide patent portfolio for ZTE phones, tablets, computers and other devices running Android and Chrome OS")
An agreement between Microsoft and Google's Motorola may or may not be number 22 on this list. But I'm sure that it will also appear on this list at some point.
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