Microsoft sues Samsung after Korean manufacturer allegedly stops paying Android royalties
Microsoft is suing Samsung for its failure to pay royalty payments on schedule – the second time that Redmond has taken legal action against the Korean electronics giant over the matter.
The issue has arisen because Microsoft claims Android infringes on a number of its patents and the company has pursued a number of controversial deals with Android smartphone manufacturers, much to the frustration of Google.
Microsoft had initially demanded that Samsung hand over Android royalty payments back in July 2011 and reached an agreement in September that year for a cross licensing deal. This caused Google to accuse Microsoft of “extortion.”
But now it seems that following Microsoft’s acquisition of the mobile phone unit of Nokia, Samsung has decided to withhold royalty payments, at least according to a Microsoft blog on the matter.
“As you may have seen, on Friday Microsoft filed legal action against Samsung in U.S. District Court, Southern District of New York,” wrote David Howard, corporate vice president and Deputy General Counsel at Microsoft. “Today’s legal action is simply to enforce our contract with Samsung.
“We don’t take lightly filing a legal action, especially against a company with which we’ve enjoyed a long and productive partnership. After spending months trying to resolve our disagreement, Samsung has made clear in a series of letters and discussions that we have a fundamental disagreement as to the meaning of our contract.”
He pointed out that Samsung had voluntarily entered into a “legally binding contract” with Microsoft in 2011, after “months of painstaking negotiations”.
“So what changed?” asked Howard. “Since Samsung entered into the agreement, its smartphone sales have quadrupled and it is now the leading worldwide player in the smartphone market. Consider this: when Samsung entered into the agreement in 2011, it shipped 82 million Android smartphones. Just three years later, it shipped 314 million Android smartphones.”
“After becoming the leading player in the worldwide smartphone market, Samsung decided late last year to stop complying with its agreement with Microsoft,” said Howard, and he said that the acquisition of Nokia’s handset division was being used as an excuse.
“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,” he wrote. “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.”
Samsung meanwhile remains tight-lipped about the matter.
“We will review the complaint in detail and determine appropriate measures in response,” Samsung told TechWeekEurope.
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