LG, Microsoft Sign Licensing Agreement

The agreement's terms haven't been disclosed, but other companies, such as HTC and Samsung, are paying per-device costs to Microsoft, which, while costly, are still less expensive than product bans or drawn-out legislation.

"We are pleased to have built upon our longstanding relationship with LG to reach a mutually beneficial agreement", Horacio Gutierrez, Corporate Vice President and deputy general counsel for Microsoft's Intellectual Property Group said. "Together with our 10 previous agreements with Android and Chrome OS device manufacturers, including HTC, Samsung and Acer, this agreement with LG means that more than 70 percent of all Android smartphones sold in the U.S. are now receiving coverage under Microsoft's patent portfolio".

These licensing agreements bring Microsoft far more money than sales of the Windows Phone system have earned. However, part of Samsung's agreement calls for the South Korean tech company to develop a Windows Phone device, so LG could also offer a Windows device in the future, if it has singed a similar agreement.

Microsoft is likely to seek more agreements from other tech companies as the Android system continues to grow. Android devices are activated more than phones or tablets with other operating systems, and Microsoft continues to develop programs that make it possible for customers to access Microsoft's IP portfolio.

While the licensing agreements are costly for tech companies such as LG, they also grant added protection for their Android devices. In today's litigious culture, with Apple filing lawsuits against Samsung, HTC and others, a Microsoft agreement backs up the patents used in the Android devices. It also removes the pressure for the phone makers or Google, which owns Android, to buy up more patent portfolios.

LG's agreement with Microsoft, though, comes as the electronics maker is trying to reclaim its place with new smartphones, and will likely cost it millions of dollars that could otherwise be invested into further development of its own products.