Handset manufacturers may have to dole out hefty royalties for each and every Android-based device sold, BusinessWeek reports. The fees would be paid to Microsoft for licensing prior patent art, although no details are available concerning exactly what those patents may be.

To the detriment of Google and its free Android operating system, the additional cost and legal complexity may chill the adoption of Android. This would also have the effect of making other platforms such as Windows Phone 7 more attractive to manufacturers, especially since many of them already bundle some of their products with Microsoft's mobile OS anyway.

HTC, maker of Google's Nexus One, has reportedly reached a settlement with Microsoft already. Meanwhile, Microsoft has also been "talking" with other manufacturers to form royalty agreements.

It should be worth noting that Microsoft is not known for litigious patent abuse, only having proactively launched two patent lawsuits in the last three years. This news comes about two months after Apple announced a duel with HTC over the use of their intellectual property as well.