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Microsoft grabs Android, Chrome royalties from world’s largest notebook manufacturer

Taiwanese laptop maker Quanta Computer agrees to pay Microsoft unspecified royalties for Microsoft’s patent protection plan.

In its first deal specifically naming Google Chrome devices, Microsoft today announced that Quanta Computer has joined its patent protection plan. Quanta has signed a patent agreement with Microsoft to cover Quanta’s tablets, smartphones and other consumer devices running the Android or Chrome Platform.

Once again, Microsoft did not disclose details of the agreement. It issued a brief statement indicating that Quanta would pay Microsoft and in exchange the device manufacturer would gain “broad coverage” for Microsoft patents.

Microsoft has been on a roll in signing manufacturers worldwide into patent portfolio agreements. Quanta, headquartered in Taipei, is known as the world’s largest contract manufacturer of notebooks. It names Apple, HP and Dell as customers.

Microsoft has now announced Android-specific licensing deals with at least eight vendors: HTC, Velocity Micro, General Dynamics, Wistron, Onkyo, Acer, ViewSonic, and Quanta. It has been on a particular streak September.

For instance, last month it publicized a licensing deal with Casio that will cover embedded Linux. Also in September, Microsoft announced a new deal with Samsung to cover Android. It previously had a broad cross-licensing deal with Samsung from 2007 that covered Linux. Ditto for an agreement with LG, also announced in 2007 which covers Linux embedded devices.

While many of these deals, including Casio’s and Samsungs, are cross-licensing agreements, meaning Microsoft gains access to the other’s intellectual property, that does not appear to be the case for Quanta Computer. Quanta will be the only licensee, the press materials signify.

Does Taiwanese Quanta fear a Microsoft lawsuit enforcing a U.S. patent – does it fear that such a lawsuit might cost millions and one day block its devices from being sold in the U.S.? Or does it enter into a license agreement for something it needs – Windows or ActiveSync – and gets the Linux/Android indemnification on top of that? Microsoft can then declare it has another licensee paying it for Android/Linux/Chrome adding corroboration it might one day use in court.

I wrote about these musings when the refreshed Samsung deal was announced. I don't completely buy into the notion put forth by patent strategy consultant Florian Mueller and others that the timing of the Samsung deal must mean that Samsung lacks faith in Google's acquisition of Motorola Mobility. That could be true, but I'm more optomistic than that. The hope is that Google's patent portfolio would one day allow Google to indemnify Android device makers the way Microsoft says it indemnifies Windows Phone 7 makers. Isn't it possible that Samsung gets something else of business value from its license agreement with Microsoft than just the assurance that Microsoft won't sue?

In an e-mail conversation with Florian Mueller, he told me, “The problem with patents is that they are not a guarantee that one is allowed to do something covered by the patent. A patent is not a right to do something. It's a right to sue others for doing something.”

That’s a sad point of view, isn’t it?

Mueller won’t disclose the names of his clients, and says his viewpoints on patents are not influenced by them anyway. His view is that Microsoft’s patents are being infringed upon and Microsoft is being a relative good guy here in going after these patent license agreements instead of taking everyone to court. In all fairness, Mueller has long argued that software patents are a bad thing and lead to ridiculous situations like the crazy number of suites in the mobility market (see graphic). He says Microsoft through its lawsuits has publicly named 25 patents it claims that Android devices infringe … 21 named in its year-old lawsuit filed against Motorola, and the rest revealed in its lawsuit against Barns & Noble.

Certainly, no one believes that these device manufacturers took Microsoft’s products, reverse engineered them, copied them and are now selling them. Microsoft is clearly bullying its way into making money on the mobile market. But for now, there is so much money in Android and embedded Linux that a growing number of companies are willing to pay the protection scheme money.

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