Google Shares Dip as Microsoft Strikes Licensing Deal With Hon Hai

Shares of Google took a small drop on Wednesday morning on news that Microsoft — the Redmond, Wash., software giant sitting on a stockpile of software patents — had struck a licensing deal with Foxconn parent company Hon Hai, effectively dealing a blow to Google in its ongoing litigation struggles with Microsoft.

Google took a hit of more that 1.5 percent this morning, dropping more than $12 to trade at close to $780 per share.

“We are pleased that the list of companies benefitting from Microsoft’s Android licensing program now includes the world’s largest contract manufacturer, Hon Hai,” Horacio Gutierrez, corporate VP and deputy general counsel of the IP group at Microsoft, said in a statement.

The agreement between Microsoft and Hon Hai effectively means that any Android or Chrome devices — such as handsets or notebooks — created by manufacturers in the Hon Hai group will require royalty payments to Microsoft.

“We recognize and respect the importance of international efforts that seek to protect intellectual property,” Samuel Fu, director of the Intellectual Property Department at Hon Hai, said in a statement. “The licensing agreement with Microsoft represents those efforts and our continued support of international trade agreements that facilitate implementation of effective patent protection.”

Google has long fought Microsoft’s claims that parts of the Android and Chrome software infringe on Microsoft’s vast collection of intellectual property holdings.

But a number of other hardware manufacturers — like HTC, Samsung, LG and more — have already signed licensing agreements with Microsoft to pay royalty fees for each Android or Chrome device manufactured.