Microsoft’s New Patent Agreement with Compal: A New Milestone for Our Android Licensing Program

Today, Microsoft announced its tenth license agreement providing coverage under our patent portfolio for Android mobile phones and tablets. Today’s agreement is with Compal, one of the world’s largest Original Design Manufacturers, or ODMs. Compal is based in Taiwan, where it produces smartphones and tablet computers for third parties, and has revenue of roughly $28 billion per year.

Today’s announcement marks Microsoft’s ninth Android agreement in the last four months. More important, today’s announcement means that companies accounting for more than half of all Android devices have now entered into patent license agreements with Microsoft.

Amidst continuing clamor about uncertainty and litigation relating to smartphone patents, we’re putting in place a series of agreements that are reasonable and fair to both sides. Our agreements ensure respect and reasonable compensation for Microsoft’s inventions and patent portfolio. Equally important, they enable licensees to make use of our patented innovations on a long-term and stable basis.

You can see this licensing progress in the chart above, showing recent lawsuits and licenses. While lawsuits may dominate many of the headlines, these are being overtaken by the number of license agreements being signed. At this point, the fast pace of licensing is reshaping the legal landscape for smartphone patents.

At Microsoft, we’re building on our extensive experience with patent licensing. Over the past decade we’ve spent roughly $4.5 billion to license in patents from other companies. These have given us the opportunity to build on the innovations of others in a responsible manner that respects their IP rights. Equally important, we’ve stood by our customers and partners with countless agreements that contain the strongest patent indemnification provisions in our industry. These ensure that if our software infringes someone else’s patents, we’ll address the problem rather than leave it to others. And as reported in this morning’s Seattle Times, we’ve now entered into 1,133 agreements over the last decade to license our patents to other companies that share our desire to respect IP rights.

Our recent Android licensing progress is illustrated in the two graphs below. The first shows the license agreements now in place with ODMs such as Compal. These companies play an important role in the smartphone and tablet markets by designing and manufacturing devices for other companies.

The licensing progress with ODMs has been matched by similar momentum with Original Equipment Manufacturers, or OEMs, who produce Android devices under their own brands. Following our agreement earlier this month with Samsung, Microsoft now has license agreements in place with OEMs that account for 53 percent of all Android smartphones in the United States.

For those who continue to protest that the smartphone patent thicket is too difficult to navigate, it’s past time to wake up. As Microsoft has entered new markets from the enterprise to the Xbox, we’ve put together comprehensive licensing programs that address not only our own needs but the needs of our customers and partners as well. As our recent agreements clearly show, Android handset manufacturers are now doing the same thing. Ultimately, that’s a good path for everyone.

About the Author

Executive Vice President and General Counsel & Corporate Vice President and Deputy General Counsel, Microsoft