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Trial Reveals Apple, Microsoft Played Nice on Patent Deals

By Rachelle Dragani MacNewsWorld ECT News Network
Aug 14, 2012 11:41 AM PT

Apple licensed some of its design and feature patents to Microsoft, according to reports from the iPhone maker's ongoing patent trial against Samsung.

Trial Reveals Apple, Microsoft Played Nice on Patent Deals

Apple patent licensing director Boris Teksler loosely discussed the deal in his courtroom testimony. The patents involved in the Microsoft deal weren't the same ones under debate currently in the California court, he said.

The agreement came with one significant condition: Microsoft could not "clone" or copy the design of Apple's products. Teksler didn't disclose the exact terms of the arrangement.

With Microsoft preparing to launch its first self-made PC, the Surface tablet, in October, it's possible that design differences between the Surface and the iPad could reveal more about the agreement.

Financial terms of the deal were undisclosed as well. While Judge Lucy Koh ordered early on in the trial that most of the court documents should be kept open to the public, she declared last week that information about cross-licensing deals should be kept private in order to protect the involved companies from weakened positions in future negotiations.

Neither Microsoft nor Apple responded to our request for comment.

Why Not Samsung?

Though it's easy to wonder whether the bitter, worldwide battles between Apple and Samsung could have been avoided if the companies also had cross-licensing agreements, the situation is likely not so simple, said Adam L.K. Philipp, founder of Aeon Law. Stakes are high in the billion-dollar mobile device industry, he said, so the timing and financials of a deal have to be exactly right for them to pass.

"Generally, cross-licenses are between two parties that have something that each wants," he told MacNewsWorld. "It may be that Samsung only had money to offer and that money was not worth it. Particularly if Samsung had doubts if the patents were valid."

Who's the Biggest Loser?

The high-stakes element of the battle makes it difficult to know which company could be more hurt from the disclosure about Apple and Microsoft's agreement, said Raymond Van Dyke, a technology consultant and patent attorney in Washington, DC.

"This is a fight to the death, and both companies have strong incentives to settle, which will likely occur soon," he told MacNewsWorld. "If Apple's patents are ruled valid, then the damages will be considerable. It is also possible under patent law that the established damages may be enhanced up to three times as a penalty for willful infringement. There is the potential for a damages determination that could be staggering -- that is the valuation of the technology in today's economics."

Whatever ends up happening between Apple and Samsung as a result of the trial remains to be seen, but now it's clear that we likely won't see a similar fight between Apple and Microsoft in the courts, said Van Dyke.

"The Apple-Microsoft licensing arrangement is a red herring to the trial," he said. "Long ago, Jobs and Gates made a deal to not compete against each other in certain areas, and both parties seem to have honored that. Thus, Microsoft has not made clones of the Apple device, which other large companies have."

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