Microsoft has signed a patent cross licensing agreement with consumer electronics manufacturer LG.

The partnership allows both firms to use the other's intellectual property in their products.

Microsoft will pay LG a lump sum for the use of its patents on operating systems and computer systems, and LG will make ongoing payment to compensate Microsoft for the use of embedded Linux in its products. The remaining terms of the deal were not disclosed.

The General Public License (GPL) that governs Linux prohibits exclusive patent deals that protect only select Linux users. The Microsoft-LG partnership however is able to circumvent the GPL provisions by offering a covenant not to sue rather than a genuine license agreement.

Microsoft claimed that the deal is similar patent agreements that it has signed with companies including Fuji Xerox, NEC, Novell and Samsung.

The Novell partnership however has some significantly differences. There Microsoft is providing a license for its intellectual property directly to the end user rather than the developer (Novell). The LG deal more closely mimics a traditional patent licensing cross licensing agreement.