There's no point in bullying a bully.
Amazon.com (Nasdaq: AMZN) and Microsoft (Nasdaq: MSFT) have inked a cross-licensing patent agreement, providing each tech giant with access to the other's patent portfolio.
Microsoft's press release indicates that it will be on the receiving end of the payments, and that may come as a surprise to those who figured that the leading online retailer wasn't trampling on the intellectual property of the world's largest software company.
Although not explicitly claiming infringement in the press release, it all boils down to Microsoft's claim that Linux and general open-source software violate many of Mr. Softy's active patents, as Amazon's Kindle and the e-tailer's Linux servers rely on open source. Rather than put up a fight, companies including Novell (Nasdaq: NOVL), Hewlett-Packard (Nasdaq: HPQ), and even Apple (Nasdaq: AAPL) have signed similar deals with Microsoft.
They may be called cross-licensing deals so both parties save face, but it's really about Microsoft cashing in on its patents so it won't be cross. They are politely phrased as two-way deals, hoping that Microsoft critics don't hoist their torches and burn Steve Ballmer in effigy. Again.
In other words, there's no point in speculating that Microsoft is going to offer up Kindle-compatible readers or incorporate any proprietary features into new Zune or Xbox devices. It's just not going to happen.
Amazon isn't an intellectual property weakling. It has flexed its patent muscles in the past, covering everything from 1-Click shopping to consumer reviews.
It's just easier for Amazon to bite the bullet and do what many other bellwethers have done in the past: whisper "uncle" so quietly that only Microsoft can hear.
Is Microsoft a big bully? Share your thoughts in the comments box below.
