Microsoft--license to deal

You back my patent, I'll back yours. That could be the software giant's motto in its quest for intellectual property.

After stepping up its own patent push, Microsoft is now trying to get its hands on other companies' intellectual property.

Doing so will give the company more freedom to develop software in new areas and help the company as it seeks to indemnify its customers against any claims of patent infringement.

"If we are able to strike cross-licensing deals with the top 30 technology companies, that alone would provide us access to a vast majority of the patents in areas we care about," David Kaefer, Microsoft's director of intellectual property licensing, told CNET

Microsoft has roughly 100 licensing deals in the works, with about 15 to 20 being broad cross-licensing pacts with other large companies, Kaefer said, adding that it can take from one to two years to reach an accord.

"We're making good progress on some," Kaefer said. "Others are moving more slowly."

It has been 11 months since Microsoft said it would step up its intellectual property efforts. The company has two formal licensing programs--one for its FAT file format and the other for its ClearType font rendering technology--and it could add more soon.

The company has started to increase the number of sales coming in, but Kaefer said the amount of money Microsoft makes by licensing its patents and other intellectual property is still far less than the revenue from any of its traditional business units.

Because Microsoft paid out about $1.4 billion in the last fiscal year to license other companies' technology, turning a profit is not a realistic goal, he said. "However, there is an opportunity to narrow the gap."

Join the clubs
Microsoft also is rapidly trying to boost its presence among the elite in the patent filing world. The software giant, which holds less than 4,000 patents, plans to file 3,000 applications for patents this year alone.

As Microsoft tries to identify companies to talk with on technology swaps, it is trying to think broadly--even striking deals with perceived rivals, such as its agreement with PalmOne. "The thing about IP licensing is you can build alliances with companies people might otherwise see as strange bedfellows," Kaefer said.

In many cases, striking a deal is the easy part, but implementing

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