Microsoft and Compal Electronics, a Taiwanese original design manufacturer that handles production of notebooks, laptops, monitors, and televisions, have signed a patent agreement.  The deal basically allows Compal to use Microsoft’s patents in their products such as tablets, mobile phones, e-readers and other consumer devices running Android or Chrome platform.  It’s the latest in a string of licensing deals Microsoft has brokered with Android manufacturers, lining their pockets with some serious royalties.

Terms of the deal weren’t disclosed but like other who signed a deal with Microsoft, Compal will pay a pretty penny for each Android device sold.

“We are pleased to have reached this agreement with Compal, one of the leaders in the original design manufacturing, or ODM, industry.  Together with the license agreements signed in the past few months with Wistron and Quanta Computer, today’s agreement with Compal means more than half of the world’s ODM industry for Android and Chrome devices is now under license to Microsoft’s patent portfolio,” said Horacio Gutierrez, corporate vice president and deputy general counsel, Intellectual Property Group at Microsoft.  “We are proud of the continued success of our licensing program in resolving IP issues surrounding Android and Chrome.”

Intellectual property is a serious matter in the ongoing mobile war, and one not to be taken lightly.   Compal is the tenth company to sign a licensing agreement with Microsoft and is the ninth Android user to sign up with the software maker.  Microsoft now has licensing agreements with more than half of Android manufacturers.

A post from Brad Smith and Horacio Gutierrez Microsoft Executive Vice President and General Counsel, Microsoft Corporate Vice President and Deputy General Counsel respectively, explains their move on patent licensing deals:

“At Microsoft we’re building on our extensive experience with patent licensing. Over the past decade we’ve spent roughly $4.5 billion to license in patents from other companies. These have given us the opportunity to build on the innovations of others in a responsible manner that respects their IP rights. Equally important, we’ve stood by our customers and partners with countless agreements that contain the strongest patent indemnification provisions in our industry. These ensure that if our software infringes someone else’s patents, we’ll address the problem rather than leave it to others. And as reported in this morning’s Seattle Times, we’ve now entered into 1,133 agreements over the last decade to license our patents to other companies that share our desire to respect IP rights.”

At present, 55% of Android ODM’s are already paying Microsoft royalties since they signed the patent licensing agreement.  Samsung and Quanta are just two of the most recent companies that signed a deal with Microsoft, and it looks like such deals aren’t about to stop anytime soon, leaving Google’s hands tied in the case of their ODM partners.

The next question is how these deals will eventually affect end users.  Some anticipate price hikes on Android devices, as manufacturers will likely seek to offset royalty payments sent to Microsoft.  Android gadgets continue to be amongst the most competitively priced devices on the market, so losing ground in this area would be a devastating development for Android makers.