Microsoft sues Samsung for failing to hand over Android royalties
Microsoft is suing Samsung over “breach of contract” after the Korean firm allegedly refused to make a royalty payment on patent licenses.
Filed in a federal court in New York, the complaint alleges Samsung has stopped making payments for patented Microsoft technology used in its Android smartphones and tablets when Redmond announced it would buy Nokia’s handset business in September 2013.
The deal struck in 2011 means Samsung pays Microsoft an undisclosed amount for each Android phone and tablet it sells.
“After becoming the leading player in the worldwide smartphone market, Samsung decided late last year to stop complying with its agreement with Microsoft,” said David Howard, deputy counsel for Microsoft in an online post.
Microsoft said Samsung is not adhering to the 2011 contract , and said it has filed the court action after months of “painstaking negotiation”.
Microsoft receives a lot of money from Android makers, generating around $2bn per year from the likes of Samsung and HTC. But the Redmond firm says Samsung thinks the contract between the two companies is void since Microsoft now has its own handset business following the Nokia acquisition.
“In September 2013, after Microsoft announced it was acquiring the Nokia Devices and Services business, Samsung began using the acquisition as an excuse to breach its contract,” continued the Microsoft statement. “Curiously, Samsung did not ask the court to decide whether the Nokia acquisition invalidated its contract with Microsoft, likely because it knew its position was meritless.”
Microsoft is confident the court will settle the technology giants’ disagreement in its favour.
A Samsung spokesperson responded, “We will review the complaint in detail and determine appropriate measures in response.”
Microsoft bought Nokia’s mobile phone unit for €3.79bn in September to try and improve its presence in the mobile market.
Microsoft also paid €1.65bn to license Nokia’s patents for 10 years, making a total transaction price of €5.44bn. The deal integrates Nokia’s design, manufacturing and marketing team into Microsoft’s business.