Microsoft and Amazon Cross-License Patents, Bank on Kindle

With very little fanfare, software giant Microsoft and online retail king have announced a broad patent cross-licensing agreement that provides each company with access to the other’s patent portfolio. The precise terms of the agreement are confidential, but two key things have been revealed: Microsoft is getting patent coverage for Amazon’s Kindle ereader technology and Amazon’s proprietary software components deployed on Unix servers…and Amazon is paying Microsoft some amount of money under the deal.

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“We are pleased to have entered into this patent license agreement with,” said Microsoft corporate VP and deputy general counsel Horacio Gutierrez, in a statement. “Microsoft’s patent portfolio is the largest and strongest in the software industry, and this agreement demonstrates our mutual respect for intellectual property as well as our ability to reach pragmatic solutions to IP issues regardless of whether proprietary or open source software is involved.”

Neither company has tipped its hand about the nature of the agreement or what either company hopes to gain through the deal, although many have noted that Microsoft getting a license to Kindle technology and cash from Amazon seems, on the face of things, to be unusual. Neither company elaborated on the “IP issues” mentioned by Gutierrez.

Microsoft does have one of the broadest patent portfolios in the technology industry, and has shown little reluctance to use its deep pockets to pursue companies and products it believes are infringing on its technology. About a year ago, Microsoft forced GPS maker TomTom into capitulation over a patent dispute regarding support for long file names in FAT file systems. Microsoft has also repeatedly asserted it believes Linux operating systems infringe on multiple Microsoft patents, although the company has yet to take action on a single instance; instead, it has been working with Novell to offer Linux enterprise customers a shield from litigation, in the event any should emerge. The open source community has repeatedly challenged Microsoft to demonstrate any infringement.