LG Electronics and Microsoft on Thursday announced a cross-licensing patent agreement that would allow the South Korean company to use Microsoft patented technology in its products, including Linux-based embedded devices and other hardware and software products, while Microsoft will gain access to LG patents including some that can be applied to Microsoft's Xbox game console.

"I expect the agreement could become a big earnings driver for LG Electronics especially given Microsoft's plans to expand its home networking business in two or three years. It's potentially a huge market," said Cho Sung-eun, an analyst at Mirae Asset Securities.
In the past year, Microsoft has signed similar agreements with companies such as Novell, Samsung Electronics and NEC. Microsoft recently stated that they're looking to sign cross-licensing deals with open-source distributors seeking royalties for patents that are supposedly being infringed by open-source technologies such as Linux, although they have not revealed which patents are infringed.