Microsoft and Barnes and Noble settle patent dispute: Nook Windows 8 tablet on the way?

Microsoft have settled their long running patent dispute with Barnes and Noble, and have entered into an unexpected partnership in the process.

Microsoft has invested a substantial $300 million in Newco, a new venture with the US bookstore chain whose Nook eBook reader is very popular stateside.

Newco will see Microsoft controlling Barnes and Noble’s digital and college businesses, delivering Nook-related products including Windows 8 and Windows Phone apps.

An enthused Microsoft president Andy Lees said that “complementary assets will accelerate e-reading innovation across a broad range of Windows devices.”

News of a Windows 8 tie-in instantly set tongues wagging, with many concluding that a Barnes and Noble Windows 8 Nook tablet must be in development. While it’s a reasonable guess, Andy Lees kept his company’s cards close to his chest, refusing to comment on speculation regarding both companies’ product roadmaps.

For $300 million, Microsoft now takes a 17.6% stake in Barnes and Noble’s $1.7 billion business. The deal also sees the disputed patents licensed to Barnes and Noble.