updated 09:00 am EDT, Wed September 28, 2011
Microsoft pushes Samsung into licensing deal
Microsoft and Samsung on Wednesday confirmed rumors of patent licensing talks by striking a cross-licensing deal for patents. The agreement works almost uniformly in Microsoft's favor and will see Samsung both pay royalties for allegedly using Microsoft patents in Android as well as help develop and market Windows Phone hardware. Exact terms of the deal weren't discussed.
If consistent with Microsoft's past practices, Samsung is likely getting a comparatively discounted royalty rate solely by agreeing to support Windows Phone, although it may have to pay as much as $15 for every phone. Barnes & Noble, Motorola, and others that are either Android-only or can't use a Microsoft OS have complained of extremely high rates they claim is meant solely to punish them for using a competing product.
Microsoft's counsel in a follow-up tried to argue that the Samsung deal was proof other companies were best off by accepting the licenses without question. For Google, which has argued that Microsoft was abusing patents, this was supposed to be a "clear path forward," Microsoft's Brad Smith and Horacio Gutierrez said.
Critics have contended that Microsoft hasn't had its claims to Android or Linux patent ownership seriously challenged outside of Motorola's still-ongoing legal resistance. As a patent-heavy company often larger than most of those it targets, many have opted to settle rather than face a dispute they can't necessarily afford and where the risk of a loss could close their entire businesses.