Selling IPR for Market Share in China

Microsoft selling patents to Xiaomi is a major coup for the Chinese company. Microsoft is obviously trying hard to get a secure position in the Chinese mobile market.

Times of India reports that Microsoft Corp is selling about 1,500 of its patents to Chinese device maker Xiaomi , a rare departure for the US company and part of what the two companies say is the start of a long-term partnership. The deal, announced on Wednesday, also includes a patent cross-licensing arrangement and a commitment by Xiaomi to install copies of Microsoft software, including Office and Skype, on its phones and tablets.

Both companies declined to discuss financial terms of the deal. "This is a very big collaboration agreement between the two companies," Wang Xiang, senior vice president at Xiaomi, said by telephone ahead of the deal. Analysts said Xiaomi's ambitions to be a major player outside China were hampered by weak patent protection and a fear of a prolonged legal battle.

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