Microsoft and Dell today announced a patent licensing agreement under which Dell will pay the software giant royalties on sales of devices powered by Google's Android and Chrome software. Through this arrangement, Microsoft and Dell have agreed to license each company's applicable intellectual property related to Android and Chrome OS devices and Xbox gaming consoles. Under the terms of the agreement, they agreed on royalties for Dell's products running the Android or Chrome platforms and on consideration to Dell for a license for Xbox gaming consoles.

"Our agreement with Dell shows what can be accomplished when companies share intellectual property," said Horacio Gutierrez, corporate vice president and deputy general counsel of the Innovation and Intellectual Property Group at Microsoft, in a statement. "We have been partnering with technology manufacturers and vendors for many years to craft licensing deals, instead of litigation strategies."

Most of the larger handset makers, such as Samsung, LG and HTC, have already agreed to pay Microsoft a royalty on Android smartphones that Microsoft believes may infringe its patents.

Motorola, due to be sold to China's Lenovo, is the last big holdout partly because of its trove of patents.