​Google and Microsoft make patent peace

After years of intellectual property lawsuit battles, the two tech giants are declaring a ceasefire in the courtroom.

After five years of intellectual property and patent wars in the U.S. and Germany, Google and Microsoft announced they were settling approximately 20 lawsuits.

In a joint statement, the two companies declared: "Microsoft and Google are pleased to 

announce an agreement on patent issues. As part of the agreement, the companies will dismiss all pending patent infringement litigation between them, including cases related to Motorola Mobility. Separately, Google and Microsoft have agreed to collaborate on certain patent matters and anticipate working together in other areas in the future to benefit our customers."

The two companies didn't disclose financial terms or exactly how the cases had been resolved.

The flash point between the two technology powers came after Google acquired Motorola Mobility, then a major Android smartphone vendor, and its patents, in 2011.

Microsoft had gone after Motorola in late 2010 with Android patent lawsuits. Unlike most Android companies, which has signed patent deals with Microsoft, Motorola, and then Motorola Mobility under Google, continued to fight Microsoft with significant success.

In return fire, Motorola Mobilty demanded Xbox patent royalties. In particular Motorola Mobility demanded higher payments for its s H.264 video and networking "essential" patents.

While Google sold Motorola Mobility to Lenovo in early 2014, Google kept Motorola's patents, and the lawsuits that went with them.

This settlement covers the Android cases and the video and networking patents. There is no word on whether Google paid Microsoft for its Android patent claims or if Microsoft gave them up. What we do know is that Microsoft makes approximately $3.4-billion a year from its Android patent licening deals. This makes Android far more profitable for Microsoft than any of its native smartphone and tablet operating systems.

Earlier this week, Microsoft re-signed an Android patent-protection pact with I-O Data for an undisclosed amount.

Besides burying the patents hatchet, Google and Microsoft agreed to work together to create open-source, and open-standard video codec. This will build on Microsoft's membership in the Alliance for Open Media to integrate WebM and VP9. WebM is an open-source video file format that works with the HTML5 video tag. VP9 is its video codec. The pair works with Xiph Foundation's open-source Vorbis and Opus audio compression codecs.

Google and Microsoft agreed to work together against patent trolls in the European Union.

In an interview, Keith Bergelt, CEO of the Open Invention Network (OIN), the Linux patent protection consortium, thinks Microsoft is moving towards working on equal terms with open-source companies. Bergelt said he had spoken to Microsoft about joining the OIN in December 2014, but they weren't ready yet to make patent peace with Linux. Still, with Microsoft CEO Satya Nadella saying he loves Linux; offering its first Linux operating system, Azure Cloud Switch; and now offering a big data service, HDInsight on Ubuntu, he believes Microsoft will finally learn to work and play well legally with Linux.

"For now the traditional ways remain prevalent, but I see it as inevitable, as open source becomes a bigger part of their pipeline and the need for interoperability increases, that Microsoft will change.. I have every hope that this CEO will carry the day."

With this new Google rapprochement, Microsoft does indeed appear to be on its way to adopting a more open-source friendly intellectual property (IP) approach. I don't expect Microsoft to change its spots immediately. Those billions of dollars from Android IP isn't small change even by Microsoft standards. Still, Microsoft is clearly changing both its business and legal models.