Software giant Microsoft announced today that it has executed a deal with South Korea’s LG Electronics that has LG paying royalties to Microsoft for it’s use of Google’s Android mobile operating system and Chrome OS, in exchange for immunity from litigation in the event Microsoft ever decides to sue Google for patent infringement. Financial terms of the arrangement were not disclosed, but Microsoft proudly trumpets that the deal now means that Microsoft is now being paid a royalty on 70 percent of Android smartphones on sale in the United States.
“We are pleased to have built upon our longstanding relationship with LG to reach a mutually beneficial agreement,” said Microsoft deputy general counsel Horacio Gutierrez, in a statement. “We are proud of the continued success of our program in resolving the IP issues surrounding Android and Chrome OS.”
Microsoft has steadily maintained that Android and Chrome OS infringe on Microsoft patents, but has so far declined to go to court with Google over the claims. Instead, Microsoft has targeted Android device makers, offering licenses that would grant them immunity from any future prosecution against Google. The upshot is that Microsoft now passively collects royalties on the majority of Android devices available in the United States—casting doubt on Google’s assertion Android is a “free” and “open” operating system.
Previously, Microsoft has made similar royalty agreements with Samsung, HTC, Acer, ViewSonic, Quanta, Onkyo, Velocity Micro, General Dynamics Itronix, and Wistrom. In at least the case of Samsung, Microsoft is receiving a per-device royalty on every Android devices Samsung sells. Microsoft has not disclosed how much revenue its licensing program generates, but some estimates have put Microsoft’s earnings from Android licensing deals at $5 per device.
Microsoft has taken a similar “fear, uncertainty, and doubt” tack with Linux—alleging for years without filing a case that the operating system infringes on Microsoft technologies. Microsoft also offers corporate and enterprise Linux users an immunity deal through it’s partnership with Attachmate/Novell regarding SUSE Linux.
Not all Android device makers have toed Microsoft’s line: Microsoft is currently engaged in litigation with Inventec, Foxconn, Motorola Mobility (which is being acquired by Google to shore up Android’s patent portfolio), as well as Nook maker Barnes & Noble.