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Microsoft agrees to a deal with LG on patent cross-licensing

"I think this is part of a continual low-level whisper campaign to make customers think twice about using technology not backed by Microsoft."

Matt Rosoff, Directions on Microsoft analyst

Microsoft Corp and South Korea's LG Electronics said yesterday they have reached a patent cross-licensing agreement aimed at further developing each other's current and future products.

LG will be able to use Microsoft's patented innovations in its products, including Linux-based embedded devices, the two high-tech giants said in a statement.

Microsoft will in turn have access to LG's patents and will license other patents developed by LG that are now owned by business solutions provider MicroConnect Group.

The companies did not disclose the terms of the agreement but said Microsoft would make a net balancing payment to LG and MicroConnect for patents related to operating and computer systems.

LG would make continuing payments to Microsoft for the value of Microsoft patents relating to Linux-based embedded devices which the it produces.

"This agreement and our good relationship with Microsoft enables LG to provide improved telecommunications solutions to our customers," said Jeong Hwan-lee, executive vice president of LG's intellectual property center.

The deal is "another example of how Microsoft is continuing to build bridges with others in the industry through intellectual property licensing," Horacio Gutierrez, vice president for intellectual property and licensing at Microsoft, was quoted as saying.

In the past year, Microsoft has announced similar agreements with Novell, Samsung, NEC, Fuji-Xerox, Seiko-Epson and Nortel.

"The company has been interested in inter-operability for a long time," Microsoft general manager of inter-operability Tom Robertson said earlier this year.

"We are doing this because our customers demanded it," Robertson said.

"More and more people are deciding they want to be able to pick and choose when it comes to inter-operability," he said.

"They want different parts to work together even though they come from different vendors," he said.

Analyst Matt Rosoff of the group Directions on Microsoft was sceptical about the latest patents deal.

"All companies do cross-licensing. Microsoft has done it for years and only now makes a big deal," said Rosoff, whose group specializes in tracking the software giant.

"I really think it is part of this ongoing, subtle competition against open source [software]," he said.

"I think this is part of a continual low-level whisper campaign to make customers think twice about using technology not backed by Microsoft," he said.

LG Electronics employs more than 82,000 people working in over 110 operations, including 81 subsidiaries around the world.

Its global sales last year totalled 38.5 billion dollars. The firm is the world's largest producer of CDMA handsets, air conditioners, optical storage products and DVD players.
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