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Microsoft and LG Electronics (LGE) have entered into a patent cross-license agreement to develop the companie's current and future product lines.

The agreement will allow LGE to use Microsoft patented products, including Linux-based embedded devices. Microsoft will be able to use LGE's patents and will license other patents by LGE that are owned by MicroConnect Group. Financial terms have not been disclosed.

Microsoft will be making a net balancing payment to LGE and MicroConnect for patents involving operating systems and computer systems. LGE will be making payments to Microsoft for Microsoft patents that deal with Linux- based embedded devices that LGE makes.

"This agreement and our good relationship with Microsoft enable LGE to provide improved telecommunications solutions to our customers," said Jeong Hwan Lee, executive vice president of the Intellectual Property Center at LGE.

"We believe that the license arrangement with Microsoft provides appropriate recognition of the value of LGE's computer system-related patents, which includes patents directed to computer architecture utilized in game consoles and other products."

Microsoft has made similar agreements with Xandros, Fuji Xerox Co. Ltd., NEC Corp., Nortel Networls, Novell Inc., Samsung and Seiko Epson Corp.