Microsoft and Siemens have signed a vast patent cross-licensing agreement that will see each company gain access to the other's many thousands of protected technological inventions.

The licensing agreement, announced today, is part of Microsoft's recently announced intellectual property (IP) policy to expand cross-licensing of its R&D efforts.

The software giant said it plans to invest $6.9 billion in research and development this year and said it possessed over 10,000 issued and pending US patents. Siemens, on the other hand, spent $6.3 billion last year and has 45,000 patents worldwide with another 40,000 filed and due to be granted.

The terms of the agreement were not disclosed although a statement said that it would "enable each company to expand offerings to customers and deliver even more comprehensive and compelling customer solutions". It will also of course raise the barrier to entry of the market even higher.

"Our agreement with Siemens is a demonstration of Microsoft's commitment to increasing our alliance with others in the industry by making our patents available for licensing on commercially reasonable terms," said Marshall Phelps, VP of Intellectual Property at Microsoft. "Technology licensing is an essential part of maintaining a healthy cycle of innovation in the IT industry, and we are pleased to be working with an industry leader such as Siemens," he added.

The two companies have already been working together in the development of the Siemens HiPath OpenScape system, which uses Microsoft Live Communications Server 2003. The system provides "intelligent, real-time, communication management", according to the company. Intelligent routing connects PDA, mobiles etc using SIP.