Microsoft, Hon Hai strike patent deal


epa03612332 View of the logo of software corporation Microsoft in Hanover, Germany, 06 March 2013. (SEBASTIAN KAHNERT/EPA)
April 17, 2013

Microsoft and electronics manufacturer Hon Hai announced Tuesday that they have made a licensing deal covering major Google products. Hon Hai said it will pay Microsoft royalties on any products that run Google’s Android mobile or Chrome operating systems that Hon Hai makes, which use technology covered by Microsoft patents. These include a variety of smartphones, tablets and televisions.

The companies did not disclose financial details of the deal, saying only that under the agreement, Microsoft will receive royalties from Hon Hai. Several companies that make Android devices have signed patent agreements with Microsoft, including Samsung, LG, HTC, Acer and Barnes & Noble.

According to the BBC, when Hon Hai makes a smartphone, tablet or television for a company that already has an agreement with Microsoft, the two companies will have to determine how to split the royalty payments.

Licensing agreements are one way to end or avoid patent suits. Intellectual property disputes between technology companies have been highlighted recently as companies such as Apple and Samsung and Google and Oracle wage legal war with each other and use patents as ammunition.

The industry also has had to deal with “patent trolls,” more formally known as Patent Assertion Entities or PAEs, which refers to companies that buy large patent portfolios to use in lawsuits with the aim of receiving settlement money. Tech companies have been asking Congress to pass legislation that would curb frivolous patent suits, such as H.R. 845, known as the SHIELD Act, which would require PAEs that lose patent suits to pay the legal fees of the companies they sue. Members of the Consumer Electronics Association met with lawmakers Tuesday to encourage them to pass the legislation.

Also on Tuesday, the House subcommittee that deals with intellectual property matters held a hearing on abusive patent litigation, looking specifically at how the United States deals with PAE suits. In his opening remarks, Rep. Bob Goodlatte (R-Va.) said that Congress, the Federal court system and the U.S. Patent and Trademark Office should take steps to stop these kinds of lawsuits.

“The patent system was never intended to be a playground for trial lawyers and frivolous claims,” Goodlatte said.

Related stories:

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Microsoft Xbox event planned for May, reports say

Windows 8 blamed as PC sales slide

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Hayley Tsukayama covers consumer technology for The Washington Post.
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