Samsung, Microsoft Sign Patent Cross-Licensing Deal

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The mobile and tablet industry is about to get shaken up, with big-ticket news currently unfolding in the tablet and smartphone industries. But as Samsung signs a patent cross-licensing deal with Microsoft, what will be the implications to the rest of the Android ecosystem?

FOSS Patents’ Florian Mueller is reporting on a breaking news item from Microsoft and Samsung. The two companies have just announced a patent license agreement, in which “Microsoft will receive royalties for Samsung’s mobile phones and tablets running Android.” This is effectively like Microsoft’s own licensing agreement with HTC, through which Redmond gets a few dollars off of each HTC Android phone sold. However, the agreement also entails that Samsung will be working closely with Microsoft in developing Windows Phone 7.

Now, granted, patent licensing deals happen all the time. But this particular licensing deal may have serious implications to the Android ecosystem. You can check out the source link for a more detailed explanation, but here’s what we understand of the matter, in summary:

• One of the reasons why Google acquired Motorola Mobility is supposedly to bolster its patent portfolio, in order to protect the Android platform and its manufacturers. By signing a patent licensing deal with Microsoft, Samsung recognizes that Android is not exactly in a strong position in terms of patents. As such, it did not wait for the Google-MMI acquisition to be concluded. Samsung wanted to resolve its Android-related intellectual property issues on its own.
• Samsung is the biggest Android OEM licensee, and Microsoft has already snagged licensing deals with quite a number of Android OEMs, such as HTC, General Dynamics, Itronix, Velocity Micro, Onkyo, Wistron, Acer and ViewSonic.
• “This leaves Motorola Mobility, with which Microsoft is currently in litigation, as the only major Android smartphone manufacturer in the U.S. without a license,” according to Microsoft.

Reading between the lines, what the Samsung-Microsoft deal means is basically that Samsung believes Android does infringe on certain technology patents owned by Microsoft, and that Android phone-makers will need to pay Microsoft for these. Reading further, this might also extend to Apple’s technology patent holdings, although Samsung isn’t getting there yet (recall that Apple’s disputes with Samsung is mostly for design patents).

Still, Samsung is actually a major patent holder, with 28,000 patents just in the U.S., and 100,000 worldwide — way bigger than Motorola Mobility. Thus, even while Samsung supported the Google-MMI acqusition, it probably knows it can better defend itself against Android-related litigation than Motorola. The company is also trying to hedge its mobile portfolio across different ecosystems: Android, Bada, Windows Phone and its newly-announced Tizen, in partnership with Intel. And working with Microsoft in developing Windows Phone 7 is probably a way of dampening the blow of Apple’s constant attacks on Samsung’s Android devices.

How will the rest of the Android ecosystem respond or react? We’ll keep you posted.