August 04, 2014 09:46
Microsoft filed a lawsuit against Samsung on Friday, accusing the Korean electronics giant of failing to honor a patent licensing deal the two companies signed three years ago.
Microsoft claims that Samsung stopped paying royalties on time and is refusing to pay interest for the delay, as required by their 2011 agreement, while Samsung alleges that Microsoft breached the agreement first.
Samsung and Microsoft signed the cross-licensing deal in September 2011. Under the contract, Microsoft's patented technologies were deemed more expensive and require Samsung to pay a set royalty every month. The U.S. company has many basic software patents and gets around US$2 billion in royalties from global Android smartphone makers per year.
But problems arose when Microsoft acquired Nokia in September of last year. According to court documents, Microsoft claims that its new affiliate should be able to use Samsung's patented technologies due to the cross-licensing agreement.
Samsung protested, saying the deal is limited to Microsoft and a new agreement needs to be forged with Nokia.
Although the exact amount remains a secret, Samsung, the world's largest smartphone maker, pays the largest amount of annual royalties to Microsoft. If Samsung wins, it could end up paying less, but if it loses it will have to continue paying the current amount.
The lawsuit is unlikely to sever ties. Microsoft has said it respects its partnership with Samsung and will continue to do so in the future. Samsung has not made any official comment on the matter yet.
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