Samsung, Google Sign Patent License Deal - Wall Street Journal ~ Electronic Gadgets

SEOUL—Samsung Electronics Co. and Google Inc. signed a broad cross-licensing deal on technology patents, strengthening an existing alliance as they try to fend off stiff competition in the market from rivals such as Apple Inc.

Samsung and Google, which are closely allied as the primary backers of the dominant Android mobile operating system, declined to disclose financial terms of the deal, which covers the two companies' existing patents, as well as those filed over the next 10 years. However, the agreement doesn't transfer ownership of patents and as a consequence won't allow Samsung to use Google's patents to defend itself in litigation with other companies such as Apple.

Samsung and Google also didn't specify whether the scope of the deal was limited to Android, which currently powers about four of every five smartphones sold globally.

The companies said that the agreement paves the way for deeper collaboration between Samsung and Google on research and development of current and future products.

Allen Lo, Google's deputy general counsel for patents, said in a statement that by working together in such a fashion, "companies can reduce the potential for litigation and focus on innovation."

The deal comes amid patent litigation between Apple and Samsung, the world's biggest smartphone maker by shipments, whose best-selling devices run Google's Android platform.

Apple has accused the South Korean company of allegedly copying the design and feel of its iPhones and iPads, in a case that dates back to 2011.

The two technology giants have been asked by a court in California to hold negotiations to try to settle their legal dispute before a new case is set to go to trial in March.

The latest litigation involves some of Samsung's newer smartphones, including the Galaxy S III. Last year, a federal jury in California ruled that Samsung violated some of Apple's patents and awarded the Cupertino, Calif.-based company damages of nearly $1 billion.

"Samsung and Google own a lot of patents, but they haven't been able to gain much leverage from those patents against Apple, Microsoft and others," Florian Mueller, an intellectual-property consultant in Germany who specializes in software patents, wrote on his blog.

Samsung declined to comment further beyond the joint statement. Apple wasn't immediately available for comment.

The cross-licensing deal also reduces the likelihood that Google and Samsung might face each other in future court battles over intellectual property. Samsung and Google have already been cooperating closely on mobile devices, with the South Korean company the dominant maker of smartphones running Android.

Even so, Google has become more of a direct competitor since it purchased Motorola Mobility in 2012 and started making its own handsets. And the fast pace of technology shifts could alter the landscape dramatically over the course of the 10-year life of the agreement.

Still, deeper cooperation on future product development between Samsung and Google could also give the South Korean tech giant a boost with development of technologies such as wearable devices, one analyst said.

Samsung's smartwatch, dubbed the Galaxy Gear, was released last year to great fanfare, but failed to impress many in the tech world. But Samsung says it sees the category as a potentially lucrative channel for future product development.

"This may help Samsung in the developing of wearable devices, which Google currently has an edge in with its Google Glass product," said James Song, an analyst with KDB Daewoo Securities.

The cooperation agreement between Samsung and Google is the latest in a complex mosaic of alliances in a global patent dispute among the various players in the smartphone industry.

Last October, a consortium of tech rivals, including Apple, Microsoft, BlackBerry Ltd., Ericsson and Sony Corp., filed lawsuits in a federal court in Texas, accusing Google, Samsung and other manufacturers of Android devices of infringing on patents that the alliance had purchased from the bankrupt Canadian telecoms company Nortel Networks Corp.

In November, Samsung also extended a broad licensing deal with Finland's Nokia Corp. through 2018, allowing Samsung to continue to use Nokia's patents and lessening the likelihood of lawsuits between the two companies. The deal, which had been set to expire last year, came after Microsoft said it would acquire Nokia's handset business.

Separately, Samsung is also involved in a dispute with Ericsson. The Swedish mobile-network company filed suit against Samsung in 2012 alleging patent infringment. Ericsson also turned to the U.S. International Trade Commission to bar U.S. imports of Samsung products. The commission is expected to issue a ruling early this year.

–Rolfe Winkler in San Francisco contributed to this article.

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