Credit: Shutterstock photoMicrosoft CorporationMSFT recently expanded the patent cross-licensing agreement with Kyocera Corporation KYO . However, the terms of the agreement have been kept under wraps.
Headquartered in Kyoto, Japan, Kyocera is a leading supplier of electronic components, printers, copiers, solar power generating systems, mobile phones, semiconductor packages, cutting tools and industrial ceramics. The company reported net sales of 1.53 trillion yen (approximately USD12.7 billion) for the year ended Mar 31, 2015.
The cross-licensing agreement covering a broad range of products and technologies will allow both Microsoft and Kyocera to access each other's patent portfolios. Notably, this deal resolved a patent infringement lawsuit between the companies filed earlier this year in the U.S. District Court.
Lawsuits are a costly affair which not only hurt company financials but also negatively impact the brand. It is therefore sensible and cheaper to enter into cooperative license agreements and sell more products and services without the fear of getting sued.
In Dec 2003, Microsoft started its Intellectual Property licensing program. Since then, the leading software company has signed thousands of licensing agreements. Microsoft is part of the Rockstar Consortium that enforces patents involved in multiple litigations. Other technology companies such as Apple Inc. AAPL , Blackberry, Ericsson and Sony SNE are also part of the Consortium.
Microsoft develops, manufactures, licenses, sells and supports software products. The company reported better-than-expected third-quarter fiscal 2015 results. Earnings, including restructuring charges, came in at 62 cents, surpassing the Zacks Consensus Estimate of 51 cents. However, revenues of $21.73 billion were down 17.9% sequentially but up 6.5% year over year.
Currently, Microsoft has a Zacks Rank #3 (Hold).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
