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Microsoft and Funai sign patent deal

Redmond and LCD maker swap patent licenses, giving Funai access to key Microsoft patents on exFAT file system, valuable in storing audio and video content.

Microsoft announced on Tuesday that it has set up a new deal to swap patents with LCD TV maker Funai.

Funai, which makes TVs sold in the U.S. under the brands Philips, Magnavox, Sylvania, and Emerson, will gain access to Microsoft's exFAT file system, an enhanced version of the company's older FAT (file allocation table) used to store and organize data on a disk.

The exFAT (extended FAT) system supports much higher-capacity drives and devices than can FAT and will quickly save files onto SD cards, USB drives, and other portable gadgets. Microsoft sees it as the ideal option for handling huge chunks of audio and video on digital photo frames, cameras, camcorders, smartphones, and of course TVs.

The cross-licensing agreement lets Funai use exFAT to develop new consumer audio and video products, including LCD TVs, for which the company is compensating Microsoft.

Microsoft was mum about what specific patents it might gain from Funai, only saying in a statement that this "exchange of innovation" would help both companies design new technologies to benefit consumers of audio/video products, including LCD TVs.

"Consumers want TVs to offer experiences that were once available primarily on personal computers. A patent license like this one allows two industry leaders to deliver the type of cutting-edge innovations that today's consumers demand," said David Kaefer, general manager of Intellectual Property Licensing at Microsoft, in a statement.

Microsoft initially rolled out exFAT for mobile phones, PDAs, audio and video appliances, and other devices running Windows Embedded edition. The company also added exFAT to its newer operating systems--Windows Vista SP1, Windows 7, and Windows Server 2008--hoping that more electronics companies would adopt it to store audio and video files on their consumer devices.

In December, Microsoft set up a new licensing program for exFAT, charging a flat $300,000 fee to manufacturers who want to use the file system in their products. But Microsoft's license for FAT technology has been the subject of controversy as Redmond has long argued that certain uses of Linux infringe on its patents in this area. The company hasn't hesitated to go after companies, such as GPS-maker Tom Tom, suing them for alleged patent violation.

Microsoft's actions prompted Linux defenders, such as the Open Invention Network, to try to overturn the patents in question, an effort that eventually helped the group land several key patents that it said could have been used against Linux.