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Apple, Microsoft reveal their Molotov-Ribbentrop Pact

Non-aggression treaty carves up phone patents

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Testimony this week in the Apple-Samsung patent trial has thrown new light on the tech world's equivalent of the Molotov–Ribbentrop Pact - the 1939 peace deal between Germany and the Soviets.

Apple and Microsoft have a non-aggression treaty giving each giant access to a range of each other's intellectual property. This means each company can each can focus its firepower on rivals.

"There's peace to each other's products," Apple's intellectual property licensing director Boris Teksler told the San Jose court. The cross-licensing agreement between Apple and Microsoft extends to cover some design patents, but no special rights, it appears. And according to Teksler, Microsoft has promised not to clone the iPhone or iPad.

The legal bod was speaking at a hearing in Samsung's ongoing trial with Apple. The South Korean electronics giant is fighting allegations that it copied Apple's iPhone design for its own handsets.

Both Apple and Microsoft have a common enemy: Google. But the pair have gone after the advertising behemoth by proxy rather than directly. Apple co-founder Steve Jobs regarded Google's Android operating system as a "stolen product" that imitated his iPhone user interface, and vowed to spend his "dying breath destroying Android", according to his biographer.

Microsoft has also targeted Android licensees, taking advantage of Google's naivety and posturing over intellectual property. By striking patent licensing agreements it's taken the main advantage, the zero cost, out of open-source-ish Android. According to one executive, it's cheaper to license Microsoft's platform than the nominally "free" Android. This forced Google to grow up fast, spending $12bn on something it didn't really want: Motorola Mobility.

Yet both have to play nice, too. Samsung, which uses Android in its phones, is a supplier of electronic components to Apple and a Windows Phone licensee.

Plenty of questions remain. We didn't learn from Teksler when this 21st Century Von Ribbentrop Pact was signed, or whether it covers what Teksler referred to as "untouchables". Trial Judge Lucy Koh denied a motion to make licensing deals with a dozen of Apple and Samsung's licensees public, arguing it would hamper future agreements. Samsung wanted details of Apple's proposed settlement in 2010 kept under wraps, but failed to do so.

So we now know that Apple proposed a royalty of $30 per smartphone for licensing the disputed patents, around 5 per cent per device. Samsung wanted half this rate. They couldn't agree, and here we are. ®

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