October 31, 2006 1:00 AM PST

Chinese firms get hold of Microsoft tech

Microsoft is taking its technology-licensing push to China.

The software maker, which began licensing its technology to start-ups in May 2005, said Tuesday that it has taken the program to China, where it is licensing three mobile phone technologies to two Chinese companies.

"This is part of our commitment to investing in China and strengthening the Chinese software market," said David Harnett, senior director of Microsoft's IP Ventures program. Much of the focus, he said, is on licensing developed in Microsoft's Beijing research lab and at its development facilities in China.

"Really, the focus is in using Chinese innovation to strengthen the Chinese software industry," he added. "The software economy (in China) is growing so fast. A great way for us to help that growth is through IP Ventures."

For starters, Microsoft is licensing mobile picture-viewing and video compression technologies to Comtech, a Shenzhen-based company that designs cell phones, telecommunications equipment and consumer gear used by both Chinese and multinational electronics makers. Another company, Talkweb, is getting licensed access to a technology that lets people upload their photo to a Web site and create cartoons of themselves. These cartoons can then be sent to a phone or other mobile gadget using a multimedia messaging service.

"We believe that Talkweb will lead China's mobile cartoon industry to a bright future," said Lisheng Xiang, director of strategy and planning at the Chang Sha, Hunan-based software maker.

Harnett said that Microsoft is working on other deals that are similar to those with Comtech and Talkweb. It is also working to create start-ups built around Microsoft technologies, he added. The software giant has used similar strategies in the U.S. and Europe, licensing both to existing companies and to new companies that try and commercialize a product that Microsoft was not looking to take to market itself.

China, though, has been noted over the years more for its less-than-robust copyright enforcement rather than for being a hotbed of intellectual property licensing.

Microsoft has been trying to wring more revenue out of its intellectual property for several years now, starting in December 2003 with an increased focus on licensing technology. Much of that early effort was on broad licensing deals with other large tech companies. More recently, though, Microsoft has focused on more narrow deals, including ones covering technology developed by Microsoft Research labs.

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