Apr 21, 2013

Foxconn to start paying Microsoft licensing fees for Android devices

Microsoft has revealed that it has entered into an agreement with Foxconn, the company that makes the iPhone and many other Android devices, to start receiving licensing fees for patents being used by Android devices. According to the agreement, Foxconn will pay a licensing fee for every device that it makes that runs on Google’s mobile operating system. Microsoft has been chasing Android manufacturers for a while now to procure licensing fees for Android features that it has long claimed are protected by its patents.

While Microsoft hasn’t revealed which Android features are covered by its patents, court documents filed in 2010 during Microsoft’s lawsuit against Motorola and Barnes & Noble reveal some of these patents. Microsoft’s patents include one from way back in 1996 that revolves around length of file names in the same file system, a flash storage memory monitoring system filed in 2003 and a contacts management system filed in 2005 among many, many others. Microsoft has said that a majority of Android handsets are being made by companies that have agreed to join Microsoft’s licensing program and now with Foxconn joining the program, it’s a certainty that Microsoft will be raking in cash from its patents, some filed almost 20 years ago.

Ars Technica points out that Foxconn makes about 40% of consumer electronics sold worldwide today and is employed by not only Apple but also companies like Acer and Amazon. Since a company can’t get licensing fees for the same patent from two different sources, the decision to pay Microsoft’s licensing fees will depend on the contract between the OEMs (Original Equipment Manufacturer) like Acer and Amazon, and the ODMs (Original Design Manufacturer) like Foxconn.

However, it hasn’t been an easy road for Microsoft to get its licensing fees from Android device makers. Google famously referred to Microsoft’s move to seek licensing fees as “extortion” in 2011 (which Microsoft equated to a spoiled kid crying) and Microsoft is still fighting a court battle against Motorola (now Google owned) for patent infringement. This all seems particularly ironic in the context of Microsoft chairman Bill Gates’ memo in 1991 where he warned against patents running amok and how in the future a large company could patent “some obvious thing” and steal profits away from other companies.

22 years later, many would argue that Microsoft is doing the exact same thing that its former chairman had warned against.

Sources: Ars Technica, Network World


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