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Microsoft makes LG Electronics latest cross-licensing patent partner

By , Network World
June 06, 2007 10:06 PM ET

Network World - Microsoft Wednesday inked another cross-licensing patent agreement, this time with South Korea's LG Electronics, covering the company's Linux-based embedded devices.

As part of the deal, LG, one of the world’s largest electronics companies, can use undefined “patented Microsoft technology” in its products, including Linux-based devices.

The agreement also covers intellectual property contained in other hardware and software products, such as game consoles.

LG is a manufacturer of CDMA, GSM and 3G handsets, IP phones, Plasma TVs, optical storage products, PDAs, notebook computers, DVD players and home theater systems, among other electronic products.

As in similar deals with Xandros (announced earlier this week), Novell, Samsung and Fuji Xerox, Microsoft did not detail just what patents LG was licensing, and LG did not say if its Linux-based devices violated any Microsoft patents.

As part of the deal, Microsoft will have access to LG patents that cover computer architecture utilized in game consoles and other products and will license other LG patents that are owned by system integrator MicroConnect Group, which is based in Manchester, England.

“This agreement is focused only on exchange of patent rights,” said David Kaefer general manager of IP licensing at Microsoft. “The open-source elements of the deal do utilize a covenant model similar to the Xandros and Novell deals, but this deal is most similar to recent agreements with Samsung and Fuji Xerox.”

Those deals were signed this year in April and March, respectively. Both covered general access to intellectual property contained in patent portfolios and included protection for customers using Linux-based software.

In terms of the “customer covenant” clause in those deals, Kaefer said, “The covenants are structured very similarly.”

Microsoft and LG did not release financial terms of the deal, but said in a press release that Microsoft would make a “net balancing” payment to LG and MicroConnect for patents related to operating systems and computer systems.

Microsoft made a similar “net balancing” payment as part of its deal with Novell that, according to that contract, reflected “the larger applicable volume of Microsoft's product shipments” versus that of Novell's products.

In addition, LG will be making ongoing payments to Microsoft to cover Microsoft patents as they relate to Linux-based embedded devices that LG produces.

LG Electronics comprises four business units - Mobile Communications, Digital Appliance, Digital Display and Digital Media. The company produced $48.5 billion in global sales in 2006.

The company is a member of the Consumer Electronics Linux Forum, which also includes Sony, Panasonic, Motorola and others. None of those companies have cross-licensing deals with Microsoft.

A search on the LG Web site turned up only one reference to Linux, which was the 2005 release of a set-top box sold under the DirecTV brand name that included “a general-purpose Linux-operating-system.” In 2001, LG produced a Linux -based wireless webpad for home users that included Internet support and a built-in multimedia player.

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