LG submits to Microsoft's sword of Damocles

Stephen Withers
Friday, 08 June 2007 05:02

IT Industry - Strategy

The cross-patenting deal between LG and Microsoft is about Linux.

Speculation that the deal portends an LG TV with a built-in Xbox is at best fanciful - there's far more IP in an Xbox than just patents.

The joint statement makes it clear that what LG is interested in is Linux. More specifically, Linux embedded in devices. Using Linux has several advantages over special-purpose development systems, including a wider pool of skilled programmers plus a whole ecosystem of tools and services to help development efforts. Consequently, Linux is showing up inside phone and other consumer electronics devices.

Most people wouldn't notice whether a particular phone, washing machine or PVR was based on Linux, nor should they care. What they do care about is getting products that work well and deliver good value for money. Software is increasingly a part of consumer goods, and that's where LG plays.

Given that Microsoft has asserted that Linux infringes on several dozen of its patents, LG is probably just being prudent. Regardless of whether it thinks those patents are valid or truly applicable to Linux, LG probably feels it can't risk getting tied up in litigation by Microsoft. And that indicates that it sees embedded Linux (not necessarily Embedded Linux) as being an important part of its future.

Frankly, such broad agreements aren't that unusual among companies with large patent arsenals. One one hand, they provide security against being sued for infringement; on the other, they give a signal to other companies that the patents concerned have some standing.

In this case, it seems that the cash value is effectively zero, as the joint statement referred to "a net balancing payment" from Microsoft. LG clearly had something Microsoft wanted - and that 'something' might have been the deal itself rather than access to LG's patent portfolio - as it appears that while Microsoft is making an upfront payment, LG's payments are ongoing. That sounds almost like a loan.

But unlike the Microsoft-Novell deal, this arrangement between Microsoft and LG isn't grandfathered under GPLv3. So if (when?) the core elements of Linux shift to GPLv3 (some commentators suggest that is inevitable as key tools from the GNU camp become licensed under GPLv3) the patent protection will apparently extend to the whole community.