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Saturday, August 02, 2014
Microsoft Sues Samsung Over Royalty Payments

Microsoft said Friday it is suing Samsung in order to enforce a contract related to Android patents with the Korean company.

Microsoft Microsoft filed the legal action against Samsung in U.S. District Court, Southern District of New York.

The two companies came to a deal in September 2011 to cross-license each other's patent portfolios. Samsung wound up paying Microsoft royalties on a series of patents.

However, Microsoft says that Samsung decided late last year to stop complying with their agreement with Microsoft. 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, according to Microsoft.

After initially refusing to pay royalties in the second year of the deal, Samsung made a late payment in November but did not add on interest, according to a redacted copy of the complaint filed in federal court in New York and provided by Microsoft.

The complaint also alleged that Samsung has asked South Korean competition authorities to change the contract to reduce or eliminate its payments to Microsoft.

"Microsoft values and respects our partnership with Samsung and expects it to continue. We are simply asking the Court to settle our disagreement, and we are confident the contract will be enforced," said Microsoft corporate vice president and deputy general counsel David Howard.

Analyst Rick Sherlund of Nomura Securities has estimated royalties on its Android patents bring Microsoft nearly $2 billion a year.

Samsung said in a statement that the company would review the complaint in detail and determine appropriate measures in response.

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