Intellectual property (IP) litigation has become another daily cost of doing business for US technology companies. From Apple and Samsung to Android patent licensing deals companies big and small pay one way or another for IP protection or usage. Microsoft has a reputation for using patents to gain licensing deals from potential competitors such as Android device makers, and last year Microsoft broke their IP licensing business into a separate entity called Microsoft Technology Licensing LLC.
Previously Microsoft would simply perform the litigation, but now patent and licensing deals will be handled by Microsoft Technology Licensing LLC which was spun off of Microsoft last year during a reorganization announced by Satya Nadella after he took over as CEO. Microsoft has been transferring their IP from Microsoft Corp. over to Microsoft Technology Licensing LLC in order to give this new entity legal power to litigate the patents.
Twenty percent of patents sold in 2014 went from Microsoft Corp. and fourteen percent of patents in 2014 were assigned to Microsoft Technology Licensing LLC, according to a report from IAM-Media . This is a massive amount of patents, with the next seller and the next assignee coming in at only 7%. Shifting patents enables Microsoft Technology Licensing LLC to operate fast and decisively to broker new deals between competitors or any companies looking to break into a market using protected technology.
Time will tell if Microsoft Technology Licensing LLC will become a destructive force in the tech world but hopefully the legal suits will be reasonable and not follow in the footsteps of other patent trolls. So far the major news concerning Microsoft Technology Licensing LLC revolves around the patent agreement struck between Fuji Xerox and Microsoft, and the lawsuit recently brought against Kyocera.
Consumers who are concerned this new licensing focused company will prevent new products from coming to market should not worry yet. Licensing deals are better than trade embargoes which prevent products from being sold in a particular market. Microsoft has a track record of striving for licensing deals over preventing product sale, and hopefully Microsoft Technology Licensing LLC will continue that trend. Licensing IP can make products more expensive which affects consumers, but companies not investing in developing new technologies cannot expect to use existing IP for free.