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Microsoft, Hop-on Ink Patent Deal

Zacks Equity Research

Microsoft Corporation (MSFT) recently announced that it has entered into a worldwide patent licensing agreement with Hop-on. However, the specific terms and conditions of the agreement have been kept confidential.

Hop-on will acquire a broad license to Microsoft patents related to Android and Chrome OS devices, including smartphones and tablets. This will generate additional revenue for Microsoft.

Hop-on Inc., a California-based company established in 1993, manufactures and sells electronic products. It is also engaged in software distribution and supply of telecommunication services worldwide. Hop-on holds several patent licensing agreements for mobile communications and computing technologies and concentrates on expanding, securing and monetizing its intellectual property privileges. Hop-on primarily focuses on devices running the Android and Chrome operating systems.

In Dec 2003, Microsoft started its Intellectual Property (IP) licensing program. Since then, the leading software company has signed more than 1,100 licensing agreements. Some of its better-known licensees are Android device makers Samsung, LG, HTC, Acer and Barnes & Noble.

Microsoft is a part of the Rockstar Consortium that also includes other technology heavy-weights such as Apple Inc. (AAPL). The organization’s intention is to enforce patents that are involved in multiple patent litigations.

Recently, companies like Cisco Systems, Inc. (CSCO) and Google Inc. (GOOG) have signed broad cross-licensing agreements that make it harder for patent trolls/patent assertion companies to enforce patents. Both Cisco and Google are part of an alliance called the Coalition for Patent Fairness that seeks to minimize litigation between technology companies, thereby helping to devote more energy to innovation.

Currently, Microsoft holds a Zacks Rank #3 (Hold).

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