Foxconn has entered into a patent agreement with Microsoft ensuring that devices powered by Google's Android and Chrome operating systems will pay royalties to Microsoft.
Hon Hai, Foxconn’s parent company, has entered into a patent deal with Microsoft as a response to an ongoing intellectual property dispute between the two parties. Hon Hai has agreed to the deal, which pays royalties to Microsoft for the disputed patents, in an attempt to keep its clients out of the way from potential lawsuits.
The dispute originates in Microsoft’s claims that devices which use Google’s Android and Chrome operating systems are making use of innovations which belong to Microsoft. The software giant originally filed legal action against the Asian firm two years ago, potentially leading to an import ban on Hon Hai’s products. Google meanwhile says these claims are based on “bogus patents”. However, Motorola’s handset division has already lost several legal disputes involving the patents, so it is not unexpected that Hon Hai would move towards a potential deal.
Foxconn assembles 40% of all devices in the computer, communications and consumer electronics industry
This is the 19th patent deal Microsoft has managed to secure in the past three years from companies which use Google’s mobile and laptop OS. HTC, Samsung, LG, Sharp and Acer have all agreed to pay Microsoft royalties. The specific terms for the deal with Hon Hai have not been disclosed yet, but what is certain is that Microsoft cannot have patent deals with both designers and manufacturers of the same product. Thus, in the cases where there is overlap between Microsoft’s patent deals, some compromise will have to be decided upon.
Hon Hai is the biggest manufacturing service provider for computes, communication and consumer electronics in the world. Forbes estimates that 40% of product assembly in that sector comes directly from Hon Hai. With more than 54,000 patents of its own, it is no stranger to patent rights; Samuel Fu, the company’s intellectual property director, made the following statement: "We recognize and respect the importance of international efforts that seek to protect intellectual property. The licensing agreement with Microsoft represents those efforts and our continued support of international trade agreements that facilitate implementation of effective patent protection."