September 29, 2011 09:06
Samsung Electronics and Microsoft have settled a patent dispute by agreeing to cross-license each other's patent portfolios, the two companies announced Wednesday.
Under the deal, Samsung will pay Microsoft US$4-5 for each smartphone it sells, or $240-300 million a year assuming it sells 60 million smartphones.
The two companies had been in negotiations since July, when Microsoft demanded royalties saying Google's Android operating system used in Samsung smartphones infringes on its patents.
Google has provided Android as a free download for worldwide mobile phone makers, leaving it to the manufacturers to deal with any patent disputes.
Taiwanese smartphone maker HTC agreed in April last year to pay Microsoft $5 in royalties for each smartphone, reportedly paying $150 million last year alone. A Samsung executive said, "I can't talk about the exact amount. But we'll pay a lower royalty than HTC for each smartphone."
If it gets $5 in royalties from major mobile phone makers for each mobile phone, Microsoft can earn more than W1 trillion (US$1=W1,171) per year, the Seattle Times said.
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