UPDATED 06:13 EDT / OCTOBER 14 2011

Microsoft Licenses Muscle In on Amazon Kindle Fire

Microsoft has a massive patent portfolio, which it uses to protect itself from companies illegally using their technology.  If Apple deals with infringement cases by taking companies to court, Microsoft has a more readily monetized strategy: licensing deals.

It may seem Microsoft’s approach is more “peaceful” than Apple’s, but they’re quite lucrative at the expense of manufacturers, like in Samsung’s case when they entered a licensing deal with Microsoft at the end of September.  Before that, HTC also signed a licensing deal with Microsoft under similar conditions.

Microsoft entered another licensing deal with the manufacturer of a device running on Google’s Android platform.  Their latest licensing “partner” is Quanta Computer, the company that makes computer hardware that other companies use like Amazon’s Kindle Fire and RIM’s BlackBerry Playbook.  Microsoft has been aggressive in their pursuit for companies using the Android platform as their own form of market control, curbing some of Android’s profits while also incentivizing manufacturers to build for Windows Phone.

With this Quanta licensing deal, Microsoft’s patent position grows stronger.  Most prominent mobile manufacturing companies have already entered a patent licensing deal with Microsoft, leaving only Motorola Mobility and Barnes & Noble out.

Microsoft already has a cross-licensing agreement with Amazon, and the purpose of  this latest patent licensing deal with Quanta is questioned, as this could payout double for the same device.

Microsoft answers the issue with this statement:

“Quanta is one of two major ODMs for which we’ve entered an Android Patent Agreement. Because we offer patent licenses to OEMs and ODMs, we put in place provisions that make sure we are not paid twice for the same device. Having said that, for the Android agreements we offer ODM’s, we seek agreements that provide coverage for as broad a set of the ODM’s offerings as possible. We cannot specify particular terms for any of the ODM agreements.”

Entering a licensing deal, though costly, is less expensive and less time consuming than battling it out in court.  Google’s come to the aid of some of its manufacturing partners that are being targeted by infringement cases, including HTC.  But Microsoft’s licensing strategy has taken on a life of its own, becoming just as integral as the mobile ecosystem that supports it.


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