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microsoftphotoMicrosoft announced today that it has signed a patent licensing agreement with Dell that will involve the two companies sharing their patents relating to Android, Chrome OS and Microsoft’s Xbox game console.

As is often the case with similar patent agreements, terms of the deal are scarce. Microsoft says the two companies reached an agreement on “royalties for Dell’s products running the Android or Chrome platforms and on consideration to Dell for a license for Xbox gaming consoles.”

That means Microsoft will be paying Dell for patents relating to the Xbox, while Dell will pay Microsoft for patents that Android and Chrome OS allegedly infringe. It will head off potentially costly patent litigation over the patents, which Microsoft says it prefers to the alternative.

“We have been partnering with technology manufacturers and vendors for many years to craft licensing deals, instead of litigation strategies,” Horacio Gutierrez, corporate vice president and deputy general counsel of the Innovation and Intellectual Property Group at Microsoft, said in a press release.

The agreement highlights one of the interesting conundrums of the current market for equipment manufacturers. While Dell and Microsoft have been collaborating for almost the past 30 years, a shrinking PC market has led manufacturers to turn away from building only Windows machines and look towards new products from Google in order to bolster their sales.

The agreement is a part of Microsoft’s continuing expansion of patent revenue related to Google’s operating systems. Licensing patents to Android manufacturers is a billion-dollar business for Microsoft.

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