April 28 (Bloomberg) — Microsoft Corp., the world’s biggest software maker, is demanding patent royalties from mobile-phone makers that use Google Inc.’s Android operating system.
HTC Corp., which makes Google’s Nexus One mobile phone, has agreed to pay under a patent licensing agreement, Redmond, Washington-based Microsoft said in a statement today without disclosing the amount. Motorola Inc. and Samsung Electronics Co. also make mobile devices that use Android.
Microsoft has been talking “with several device manufacturers to address our concerns relative to the Android mobile platform,” Horacio Gutierrez, the company’s deputy general counsel for intellectual property and licensing, said in an e-mailed statement without naming the companies involved.
Google, owner of the world’s most popular search engine, offers Android for free to handset companies, and seeks to make money instead from selling advertising tied to Android users’ searches and application uses. Microsoft’s demands expand the legal issues around Android and raise the possibility of more companies seeking royalties, said Michael Gartenberg, a partner at research firm Altimeter Group.
“The message is so not subtle — Android is not free and not only is not free, it can start being quite expensive over time,” Gartenberg said. “The irony of the fact is that for every HTC Android phone that ships, Microsoft will get a check.”
Dealing With Microsoft
Rob Enderle, principal analyst for the Enderle Group in San Jose, California, estimates that HTC and most other handset manufacturers would have to pay Microsoft $20 to $40 per phone to license the intellectual property required for Android.
Unless Google somehow figures out how to ax this cost, “Android is going to fall off as an expensive and risky platform,” he said. “Nobody wants to deal with Microsoft.”
Apple Inc. already has a patent-infringement complaint pending against HTC over phones that run on Android. Research In Motion Ltd., Nokia Oyj and Palm Inc. are among the device makers that might claim to have patent rights to Android, Gartenberg said.
HTC, based in Taoyuan, Taiwan, also makes phones that run on Microsoft’s Windows Mobile operating system.
Anthony House, a spokesman for Mountain View, California- based Google, said the company isn’t ready to comment on the matter.
Apple, maker of the iPhone, is seeking to block U.S. imports of HTC phones that run on Android. That case is pending before the U.S. International Trade Commission in Washington.
In a March 15 blog posting, Gutierrez said the Apple case is proof that the mobile phone industry “is in the process of sorting out what royalties will be” for the software that adds the features such as Internet access and downloading capabilities.
He said Microsoft has “consistently taken a proactive approach to licensing.” The company, which is typically defending itself against four dozen patent-infringement suits at any given time, isn’t known for filing lawsuits over its own patents. Since 2007, the company has filed two patent lawsuits against companies that didn’t sue it first, according to Bloomberg data.