Microsoft launches break of contract lawsuit at manufacturing giant for “unpaid royalties” and missing paperwork
Microsoft has slapped Foxconn Technology with a lawsuit for missing patent payments, but the manufacturing giant has angrily hit back.
According to Microsoft, it signed a “confidential patent licensing agreement” with Hon Hai Precision Industry back in 2013. That agreement apparently gave Foxconn permission to “make, use, sell, or dispose of certain covered products” for a defined period.
Microsoft alleges that Hon Hai under the terms of that 2013 agreement was supposed to file “accurate royalty reports” to Microsoft and to make certain royalty payments to Redmond.
Microsoft also alleged that Hon Hai had denied its auditor access to information to obtain the licensing data, it said in the lawsuit filed in San Jose, California.
“In light of Hon Hai’s perpetual failure to meet its contractual obligations under the agreement after extensive negotiations between the parties, including in particular its obligation to submit to an independent audit, Microsoft is left with no choice but to file this breach of contract lawsuit, in the jurisdiction chosen by both Hon Hai and Microsoft for resolution of such disputes,” said the Microsoft lawsuit.
“Microsoft takes its own contractual commitments seriously and we expect other companies to do the same,” a Microsoft spokesperson told Cnet. “This legal action is simply to exercise the reporting and audit terms of a contract we signed in 2013 with Hon Hai. Our working relationship with Hon Hai is important and we are working to resolve our disagreement.”
But Foxconn has completely rejected Microsoft’s version of events, and said that as a contract manufacturer, it has never needed to pay royalties for the US giant’s software.
Foxconn founder and chief executive Terry Gou told an impromptu news conference in Taipei that “patent infringement” is not an issue for his group.
Indeed, according to Reuters, Gou said the group “will suffer almost no any loss” as a result of the lawsuit.
Foxconn “has never paid any patent fees to Microsoft,” Gou reportedly said.
Foxconn apparently received notice of the lawsuit on Tuesday, Reuters quoted a person with direct knowledge of the matter.
Guo was said to be “furious” and will fight back, the person reportedly said.
And Guo also reportedly used a Facebook posting to question why a software firm would not earn patent royalties from vendors that made use of software.
“They should not pick on manufacturers,” Guo told the news conference.
Microsoft is no stranger to hitting big name firms with patent infringement lawsuits.
Microsoft’s campaign against Android caused an exasperated Google to accuse Microsoft of “extortion.”
Google never forgave Microsoft, and it refused for example to make any official apps or services available for the Windows Phone or Windows Mobile platforms.