On Monday, Microsoft announced a deal with
Linux distributor Xandros, the details of which were similar to a
previously announced deal with Novell. As a result of these deals, both Xandros and Novell (and their customers) are immune from any IP infringement threats that Microsoft might make. Although it's really an old story, Microsoft has once again been making vague threats about
wanting to collect royalties from users of open source software. Today the company announced yet another Linux-related deal, as
electronics maker LG will license some IP from Microsoft in exchange for its ability to use Linux in its products. At first glance, this deal would appear to be the fruit of Microsoft's intimidation tactics, and some will assume that this is just LG paying Microsoft "protection money" for the right to operate its own business. But as part of the deal, Microsoft gets to license some IP from LG and one of its partners, and in fact, Microsoft is paying more money to LG than the other way around. The most likely explanation is that neither side really needs the other side's IP to continue doing business, but, rather, Microsoft is simply buying itself a licensee of its patents. In this respect, the move looks fairly similar to what NTP did during its battle with Research In Motion, when it
took equity stakes in two companies while simultaneously getting them to license the relevant patents. Later on, if this actually becomes a contentious issue, Microsoft will point to LG as an example of a company that recognized the need to license its IP in order to keep using Linux.