Microsoft sues Samsung over Android royalty payments

Aug 03 2014, 09:16 IST
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On Friday, Microsoft filed a lawsuit against Samsung, accusing the company of going back on the patent licensing deal the two signed three years ago. On Friday, Microsoft filed a lawsuit against Samsung, accusing the company of going back on the patent licensing deal the two signed three years ago.
SummaryApple and Samsung have been suing each other for years over patent disagreements.

Apple and Samsung have been suing each other for years over patent disagreements. But Microsoft and Samsung took a different tack, signing a patent licensing deal in 2011 that has kept the peace between the two companies.

Until now. On Friday, Microsoft filed a lawsuit against Samsung, accusing the company of going back on the patent licensing deal the two signed three years ago.

In the lawsuit, Microsoft said that Samsung stopped making royalty payments on time last fall and is refusing to pay interest for the delay, as required by their 2011 agreement, which related to Samsung’s use of Microsoft’s intellectual property in its Android smartphones and tablets. Samsung threatened to violate the agreement again, according to Microsoft, because it felt that Microsoft’s acquisition of Nokia’s mobile business amounted to a breach of contract.

Microsoft denied that the Nokia deal, which was completed in April, violated the previous agreement. In a blog post, David Howard, Microsoft’s deputy general counsel and corporate vice president, suggested that the real reason Samsung decided to stop paying was that its smartphones sales have quadrupled since the two companies signed their agreement. While the terms of the deal are confidential, royalty payments by licensees like Samsung typically go up as sales increase.

In a statement, Samsung said it was still reviewing the complaint and would “determine the appropriate measures in response.”

The heavily redacted lawsuit does not say how much money Microsoft believes it is owed by Samsung. Analysts have estimated that Microsoft receives billions of dollars a year in payments through licensing agreements with Android-device makers.

“Samsung predicted it would be successful, but no one imagined their Android smartphone sales would increase this much,” Howard wrote, adding that Microsoft has spent months trying to resolve its disagreement with Samsung.

NICK WINGFIELD

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