HTC has agreed to pay Microsoft a royalty when it sells a mobile phone running Google's Android operating system.

But why does Microsoft make money from Google's software? Android is based on open source software - and Microsoft has long raised fears that aspects of Linux may infringe on its patents.

The deal with HTC is described as a patent agreement which "expands HTC’s long-standing business relationship with Microsoft". HTC also sells phones based on Windows Mobile.

The deal could be seen as a veiled threat to other handset makers choosing Android - if they don't have such an agreement in place then presumably Microsoft is at liberty to sue them for patent infringement?

Steve Ballmer has a history of warning enterprises using Linux that Microsoft considers the open source operating system to be in breach of its patents. Talk of pending legal action aims to put off would-be purchasers - or at least delay buying decisions.

Microsoft's bland eight-line statement makes no mention of which patents are covered. Hat tip to Ina Fried at CNET for joining the dots.

Microsoft's deputy counsel Horacio Gutierrez said the company was in talks with other "device manufacturers to address our concerns relative to the Android mobile platform".

Mobile players like Nokia, Apple and RIM are in the midst of a patent lawsuit daisy chain - see stories below.

Microsoft's press release is here. ®