Microsoft, LG Sign Linux Pact

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 Enterprises 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.

LG also is a partner of Microsoft in that it licenses Windows CE for use in its IP phones and produces Windows-based notebook computers.

The deal with LG comes after Microsoft said last month it would seek royalties for patents that it says are being infringed upon by open-source technologies such as Linux. The company, however, said it would prefer to sign patent and cross-licensing deals with open-source distributors rather than seek payments via litigation.

The open source community, specifically the Free Software Foundation, reacted by tweaking the final draft release of the GNU General Public License (GPL) 3.0, which was released May 31, to prohibit such patent deals. The GPLv3 is expected to be officially published on June 29.

Open source advocates contend that Microsoft is doing no more than bullying the Linux community with the threat of patent violations, since it has not divulged what patents are infringed upon by Linux and other open source software.

Microsoft reiterated this week at its annual TechEd conference that its position is to protect intellectual property rights.

"The approach that Microsoft is taking is to work with industry partners to ensure that when customers want to use open source software they can do so with the knowledge and security that the software brings with it all the licensing rights that are required," Bob Muglia, senior vice president for server and tools at Microsoft, said during his keynote address Monday.

In a press release announcing the partnership, LG and MicroConnect executives struck the same tone.

"We believe in the importance of respecting the [intellectual property] rights of others and that patent collaboration and protection is a best business practice the whole industry should be engaged in," said Jeong Hwan Lee, executive vice president of the Intellectual Property Center at LG.

Alan Loudermilk, founding partner of MicroConnect, said, "MicroConnect is pleased to be able to make a contribution to the strengthened [intellectual property] relationship between LGE and Microsoft."

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