Back to top

Analyst Blog

Microsoft Corporation recently entered into a patent cross-licensing agreement with Canon Inc. However, the specific terms and conditions of the agreement have been kept under wraps.

Headquartered in Japan, Canon manufactures imaging and optical products, including cameras, camcorders, photocopiers, steppers, computer printers and medical equipment. The company has manufacturing and marketing subsidiaries in Japan, the Americas, Europe, Asia and Oceania.

The cross-licensing agreement covers a broad range of products and technologies, including certain digital imaging and mobile consumer products. Per the deal, Microsoft and Canon will be able to access each other’s patent portfolios. Such deals avert the risk of unnecessary patent lawsuits and enable companies to focus on offering inventive technologies.

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 more than 1,100 licensing agreements. Microsoft is part of the Rockstar Consortium that enforces patents involved in multiple litigations.  Other technology companies such as Apple Inc. , Blackberry, Ericsson and Sony are also part of the Consortium.

Microsoft Corporation develops, manufactures, licenses, sells and supports software products. The company reported better-than-expected third-quarter results.However, revenues of $20.40 billion were down 16.8% sequentially and 0.4% from last year.

Currently, Microsoft has a Zacks Rank #3 (Hold). Another stock worth considering at this time is Aspen Technology, Inc. , sporting a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.