In reference to a patent suit launched against Motorola, Microsoft CEO Steve Ballmer recently told The Wall Street Journal that Android, the open-source mobile operating system developed by Google, isn’t free.

“Android has a patent fee,” Ballmer said. “It’s not like Android’s free. You do have to license patents. HTC’s signed a license with us and you’re going to see license fees clearly for Android as well as for Windows.”

What Ballmer means is that Microsoft believes that Android violates a suite of 9 patents held by Microsoft, and that anyone shipping devices running Android must therefore pay Microsoft for the privilege of using its intellectual property.

For this strategy to work, Microsoft has to go after every vendor of any scale shipping devices running Android - otherwise, its policy of deterrence, obviously designed to encourage firms to license from Microsoft first, rather than risk litigation, won’t work.

But what if Ballmer didn’t count on one of the biggest potential users of the Android OS being the government of a sovereign nation, one that possesses a market so vast, and growing at such an explosive pace, that Microsoft desperately wants a piece of it?

“The uptake of android in China was phenomenal, they were way ahead of everyone else,” says Art Swift, vice president of marketing at MIPS Technologies, a company with close ties to China’s Institute of Computing Technology, which is an architecture licensee of the MIPS instruction set for microprocessors.

MIPS has yet to make an announcement on the subject, but Swift said that the first ever MIPS-powered phone will come out in the Chinese market in the near future, and that it will be running Android.

If, as seems likely, the device is running on a Loongson processor, the ICT-designed CPU that uses the MIPS instruction set, Microsoft will have to attempt to collect licensing fees from what is likely to be a commercial partner of the ICT, such as Loongson Technologies or some domestic handset manufacturer. It’s not quite the Chinese government, but in a country where all the most powerful companies are owned and run by the state, and domestic firms necessarily have ties to the government, it’s close enough.

When I asked Swift if Microsoft would pursue the Chinese government, he laughed. “Good luck to them – that’s just my opinion,” he said.

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