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March 29, 2006

Microsoft opens up hardware patents for licensing

Posted by David Hunter at 10:23 AM ET.

Elizabeth Montalbano at InfoWorld reports:

In a continued effort to derive revenue from licensing patented technology, Microsoft (Profile, Products, Articles) plans to let third parties license intellectual property (IP) it developed for its own mouse products.

Microsoft will open up licensing for three technologies — Tilt Wheel, U2, and Magnifier, said David Kaefer, a director of business development for Microsoft. It marks the first time the company is licensing patents for hardware technology, he said.

Licensing patented technology to third parties is a fairly new practice for Microsoft. In 2003, the company hired Marshall Phelps, the mastermind behind IBM’s patent-licensing program, to lead its IP Licensing Group, hoping to follow IBM’s success in making money from charging third parties to use technology it has patented.

IBM has earned the most patents of any company worldwide for 13 years running. According to its 2005 financial statement, the company that year earned nearly $367 million in royalty-based licensing fees and $236 million in sales and other transfers of IP.

Rob Enderle, principal analyst for the Enderle Group, said Microsoft is interested in seeing its own patent-licensing business grow not only to make more money, but also to have a hand in directing future uses for products that use its IP.

“Microsoft has learned over time that license revenue goes straight to the bottom line and has virtually no risk associated with it,” he said. “More importantly, if what you license is broadly used, it gives you substantial say on the direction of future offerings that use your stuff.”

I guess, but the money is real nice too. You can track the latest Microsoft patent activity at

Filed under General Business, Licensing, Mice, Microsoft, Microsoft Hardware, Patents

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One Response to “Microsoft opens up hardware patents for licensing”

  1. Microsoft hits Belkin on patent, gets new judge in Eolas retrial -- Microsoft News Tracker Says:

    [...] Microsoft has been in licensing discussions with Belkin about U2 for more than two years but has reached no agreement, which is why the software company is filing the complaint, said Tom Burt, corporate vice president and deputy general counsel for Microsoft, in a statement via e-mail. Microsoft had started licensing U2 in March and apparently a number of firms have taken them up on it. [...]

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