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Acer, maker of the popular Iconia Android 3.0 Honeycomb tablet has become the latest device maker to cave in to Microsoft's licensing demands.  (Source: Amazon.com)
Acer, Viewsonic agree to pay Microsoft's toll

Microsoft Corp. (MSFT) has already inked lucrative licensing details with General Dynamics Corp. (GD) (owners of Itronix, a maker of rugged tablets) [source]; Velocity Micro, Inc. [source]; Onkyo Corp. [source] (JSD:6628); and HTC Corp. (SEO:066570) [source].  It's pressuring Samsung Electronics Comp., Ltd. (SEO:005930) into a similar licensing deal.  Reportedly it wants up to $15 per device sold.  

So what do all these companies have in common?  They all use Google Inc.'s (GOOG) Android operating system and all are afraid that Microsoft may make good on its threat to sue them if they don't pay licensing fees.

Now Taiwan's Acer Inc. (
TPE:2353) has agreed [press release] to a similar licensing arrangement, though it declined to disclose how much it had agreed to pay per device.  Acer makes the popular Android 3.x "Honeycomb" Iconia tablet.

Horacio Gutierrez, corporate vice president and deputy general counsel of Intellectual Property and Licensing at Microsoft comments, "We are pleased that Acer is taking advantage of our industry wide licensing program established to help companies address Android's IP issues. This agreement is an example of how industry leaders can reach commercially reasonable arrangements that address intellectual property."

Of course of amiable phrasing "Help... address Android's IP issues" translates roughly to "forced to pay under threat of lawsuit".

Google does offer Android to device makers for free, so licensing isn't game over to Android manufacturers unlike Apple, Inc.'s (
AAPL) lawsuit campaign [1][2][3][4][5][6], which simply looks to ban Android devices from the market.  However, it does shift the balance of power slightly in the favor of Microsoft, who is trying to push its own Windows Phone 7 smartphone operating system on the masses, by making it less profitable to make Android devices.

Many more manufacturers will like opt the route of Acer and HTC -- simply paying Microsoft's demanded toll.



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By sprockkets on 9/8/2011 8:22:55 PM , Rating: 2
I don't know why it is so hard for you to see why they offer no protection; they charge $0 for Android.

quote:
By extension, it reinforces why companies are afraid of using Open Source software that has no amendments around the GNU/Apache License indemnity.


You do know that at least the old Novell and Red Hat offer protection against BS from Microsoft? We still don't know exactly what patents MS has against Linux except FUD.


By Zuul on 9/9/2011 12:52:28 AM , Rating: 2
I think you have misinterpreted my intent - I agree with your statement around why they don't indemnify their partners. Since they don't make direct revenue from licensing Android, it's tough to justify it. I'm saying their business model, which includes that, has made them what they are today, however they are now in a very tough situation.

I'm fully aware of Redhat's agreements - before my organization used their OS, I negotiated several of the terms on it and we have our own customized agreement with them. Redhat doesn't run only the standard GNU/Apache License agreement - they have their own modifications for it. As I said, many large enterprises are afraid of using open source that has no amendments around GNU/Apache license indemnities.

I've dealt with companies that refuse to indemnify us from patent infringements. For our organization, the risks are too great - we will walk away and find another solution.

For greater clarity, the agreements i'm referring to regarding indemnity are generally the licensing agreements that most of us when installing software, just click 'I Accept' to. Large enterprises generally negotiate a separate agreement that superceeds the 'click wrap' agreements.


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