By Elizabeth Millard

May 13, 2005 10:39AM

``There`s a greater sense of strategy with patents now, particularly with technology companies,`` said Adonis Neblett, an intellectual property attorney at Minneapolis-based firm Fredrikson & Byron.

Microsoft and Toshiba have struck a deal to use some of each other`s patents for personal computers and digital electric home appliances, without payment.

The agreement was signed in late April, and will give the two companies the ability to fold new technology into their products. Of particular interest for the companies is the possibility of expanding hardware options for digital electric appliances, which is a hot market and expected to grow.

Microsoft already has cross-licensing agreements with Sun Microsystems and SAP AG , among others, but this is the first patent swapping deal with a Japanese electronics maker.

Mine, Yours, Ours

The companies have not provided details on precisely which technological projects will be involved, but analysts have noted that Toshiba has been interested in concentrating more heavily on selling its own digital products rather than memory chips .

Microsoft, meanwhile, is expected to extend Toshiba`s technology into its personal computer division, but it has not articulated how that effort will add to the company`s existing products.

Sharing and Caring

The accord between Microsoft and Toshiba is part of a growing trend among technology companies.

Rather than trying to find a way around a competitor`s patent, many companies have come to believe it is better to play nice than waste money in development time and patent disputes.

One high-profile example of this was seen last year, when Sony and Samsung announced that they would be sharing some patents on basic technology, sidestepping potential disputes while speeding research at each company.

Solid Strategy

In addition to saving on legal costs, sharing patents has become a way to streamline development in an intensely competitive marketplace for digital technologies.

Although speed to market always has been important for companies, the pace of innovation has put increasing pressure on technology firms to work more quickly and more efficiently.

``There`s a greater sense of strategy with patents now, particularly with technology companies,`` said Adonis Neblett, an intellectual property attorney at Minneapolis-based firm Fredrikson & Byron.

``Sometimes, teaming up makes the most sense, because it helps development, but also because you can control the kind of information you`re giving to a competitor,`` he added.