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Microsoft, LG Electronics Sign Patent Cross-License Pact

Microsoft announced it has agreed to a cross-licensing deal with LG Electronics Inc.  The agreement between the two companies covers hardware and software intellectual property, including the Linux operating system.  It took the two companies more than four years to finalize the deal, which began in 2003.

The deal will allow LG Electronics to have access to Microsoft patents which can be used in computer and home appliance products.  Microsoft will have access to LG patents that deal with LG computer-related products.

"We believe that the license agreement with Microsoft provides appropriate recognition of the value of LG's computer system-related patents, which includes patents directed to computer architecture utilized in game consoles and other products," said Jeong Hwan Lee, LG's executive vice president of intellectual property.

Analysts expect LG to be able to better compete with companies such as Samsung in the next-generation mobile devices market.

"This agreement is another example of how Microsoft is continuing to build bridges with others in the industry through intellectual property licensing," said Horacio Gutierrez, vice president of Microsoft Intellectual Property and Licensing.

Both companies chose not to disclose financial terms of the deal.

Some analysts and critics accuse Microsoft of a "de facto advance for Redmond's unproven claims to Linux-related intellectual property."  In November, Microsoft's Steve Ballmer made a claim on Linux code -- then Novell and Microsoft signed a deal to work together.  More recently, Microsoft announced it wants royalties from Linux and other open source technology.

Microsoft has agreed to similar deals with Novell, NEC, Samsung Electronics, Seiko Epson, Nortel Networks and Fuji Xerox.