Citi Analyst Walter Pritchard, reports that Microsoft is currently earning $5 for every Android handset manufactured by HTC. This payment comes in the form of royalties which HTC pays for infringing some of the patents owned by Microsoft.
Android is free and open for everyone to use and modify, however few features implemented by HTC on their Android phones violates patents owned by Microsoft. There was no mentioning whether every Android phone violated their patents or only phones manufactured by HTC . Below is the letter of settlement that Microsoft reached with HTC.
REDMOND, Wash. — April 27, 2010 — Microsoft Corp. and HTC Corp. have signed a patent agreement that provides broad coverage under Microsoft’s patent portfolio for HTC’s mobile phones running the Android mobile platform. Under the terms of the agreement, Microsoft will receive royalties from HTC.
The agreement expands HTC’s long-standing business relationship with Microsoft.
“HTC and Microsoft have a long history of technical and commercial collaboration, and today’s agreement is an example of how industry leaders can reach commercial arrangements that address intellectual property,” said Horacio Gutierrez, corporate vice president and deputy general counsel of Intellectual Property and Licensing at Microsoft. “We are pleased to continue our collaboration with HTC.”
Microsoft’s Commitment to Licensing Intellectual Property
The licensing agreement is another example of the important role intellectual property (IP) plays in ensuring a healthy and vibrant IT ecosystem. Since Microsoft launched its IP licensing program in December 2003, the company has entered into more than 600 licensing agreements and continues to develop programs that make it possible for customers, partners and competitors to access its IP portfolio. The program was developed to open access to Microsoft’s significant research and development investments and its growing, broad patent and IP portfolio. More information about Microsoft’s licensing programs is available at http://www.microsoft.com/iplicensing.
Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential. Source
We are sure that Microsoft would be looking to go after other Android phone manufactures, as this can’t be implementation by HTC only. Microsoft can use the above settlement as a proof of infringement for other cases. Google is a big company and to accuse it directly can be little too much for Microsoft. It isn’t that they aren’t capable of doing it but they may be, just want to be careful.
Remember, Microsoft went after Motorola related to the same issue, however that issue is still unresolved.
With all the above things said, Microsoft will quietly be enjoying success of Android. Microsoft is earning five times more from Android than they are earning from Windows Phone, right now.