Nexus One maker HTC agrees to pay Microsoft royalty

Microsoft Corp has entered into a patent agreement with mobile handset maker HTC Corp, through which it will receive royalty payments on HTC's mobile phones running Android software of Google.

"Microsoft and HTC have signed a patent agreement that provides broad coverage under Microsoft's patent portfolio for HTC's mobile phones running the Android mobile platform," the software company said in a statement yesterday.

Under the terms of the agreement, Microsoft would receive royalties from HTC, it added. However, Microsoft did not disclose the financial details of the agreement.

The deal covers all Android-based phones made by HTC, including the Nexus One, which Google sells directly.

"HTC and Microsoft have a long history of technical and commercial collaboration, and today's agreement is an example of how industry leaders can reach commercial arrangements that address intellectual property," Microsoft corporate vice-president and deputy general counsel of intellectual property and licensing Horacio Gutierrez said.

The deal comes as a patent battle in the mobile phone space has sprung up. Last month, Apple sued HTC over its Android phones, accusing it of infringing patents related to the iPhone.