MSFT Financial Analyst Meeting: Bill Gates "It was probably 14 years or so ago when IBM, as part of their relationship with us, came and visited me and said, hey, they'd be willing to license their patents to us. And we said, oh, patents, wow, you want to license to us. In fact, we did enter into an agreement with IBM, which IBM has done with many others, Microsoft has done with many others, where we had a certain type of cross-license. And I'd say year after year, certainly subsequent to that, that is something we've put a lot of energy into.
Patent numbers can sometimes be a bit misleading, because you really have a choice when you have an idea how many patents it breaks down into, and how novel and important that idea might be. Again, there's no precise science on this. This is one measure of patent importance called “current impact,” and what it does is say, patents coming after yours, how much do they think your work is of enough importance that they cite that prior art. And it's one of about four or five measures people use just to look at overall patent quality. This is compared here to a group of other companies that do similar types work. You can see we measure up fairly well. Not a dramatic difference, ranging from 1.45 to 2.23. But we think parents are patents: What we're doing is, if anything, more valuable than what others are doing.
Our patents are on some fairly basic things: these new approaches to TV, or interactive gaming, the work we're doing in speech recognition and understanding. So we end up with a very broad portfolio, and that's something that we will continue to invest in and has always been something that we look at with other companies in the industry and decide what sort of licensing relationships we should have with them.
Just in the last year, examples of this are our cross-license with SAP; an IP license with Sun, as part of our new relationship with them; we had some cases like InterTrust, that there's actually–there was some level of court activity before we reached a license to their full portfolio that related to digital rights management. So a lot of activity, a lot of visibility."
See the transcript for more on patents etc. and this page for an index of all speech/ppt downloads from the financial analyst briefing yesterday