Microsoft Takes Legal Action Against Samsung For Not Paying Android Royalties

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Back in 2011, Microsoft announced that it has signed a definitive agreement with Samsung Electronics Co. Ltd., to cross-license the patent portfolios of both companies, providing broad coverage for each company’s products. Under the terms of the agreement, Microsoft will receive royalties for Samsung’s mobile phones and tablets running the Android mobile platform. Today, Microsoft surprised everyone by announcing that they have filed legal action against Samsung in U.S. District Court, Southern District of New York.

Why? Because, Samsung is stopped paying patent royalties as per the contract it signed in 2011 citing lame reasons like Microsoft acquired Nokia’s Devices and Services business.   said, “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.”

After becoming the leading player in the worldwide smartphone market, Samsung decided late last year to stop complying with its 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. 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.

Microsoft and Samsung have a long history of collaboration. 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.

Read more on it here.

When Microsoft and Samsung announced patent licensing agreement, Google commented the following,

“This is the same tactic we’ve seen time and again from Microsoft. Failing to succeed in the smartphone market, they are resorting to legal measures to extort profit from others’ achievements and hinder the pace of innovation. We remain focused on building new technology and supporting Android partners.”

Again Microsoft responded the following,

These agreements prove that licensing works. They show what can be achieved when companies sit down and address intellectual property issues in a responsible manner. The rapid growth of the technology industry, and its continued fast pace of innovation are founded on mutual respect for IP. Intellectual property continues to provide the engine that incentivizes research and development, leading to inventions that put new products and services in the hands of millions of consumers and businesses.

We recognize that some businesses and commentators – Google chief among them – have complained about the potential impact of patents on Android and software innovation. To them, we say this: look at today’s announcement. If industry leaders such as Samsung and HTC can enter into these agreements, doesn’t this provide a clear path forward?

  • RDF

    I do not buy anything anymore from samsung.

    • kimck99

      +1 I am Korean and I’m fed up with Samsung. Unrelated to technology, someone I know has a company that had worked with Samsung to have them be a supplier of “parts” for manufacturing a product. They had signed NDA’s, confidentiality agreements, etc. etc. so that Samsung would not steal their patented work. Will guess what, while the supplier group was providing the ‘parts’, another group reverse engineered the part and begin selling it.
      The little company battled for years in court and they finally won. Samsung tried to drag the lawsuit out for years to try to force the smaller company to give in due to high litigation cost. But they didn’t quiet and won.
      This didn’t make the big news because it wasn’t ‘high-tech’ (ie. smartphones, tablets, consumer electronics, etc.) Nevertheless, after learning about this and the behavior of similar pattern of ‘stealing’ or engaging in unethical business practices, I had enough of Samsung I have not bought anything Samsung in years. My last purchase as a refrigerator many years again and that will be my last Samsung purchase.

  • wat

    Hate to crush you Windows fanboys dreams but that is complete bullshit on Microsoft’s half. Signing a cross patent agreement when MS made no phones is completely different to allowing MS to use any and all related patents in new Nokia phones since purchasing them. Samsung would make more money out of the patent royalties from making MS pay per device than they would benefit from the cross license agreement. Fuck MS, I will laugh the day they die.

    • Alan

      The point is that, as a business, Samsung have an obligation to honour the contracts and agreements they sign. If they didn’t want to pay then they shouldn’t have signed the agreement with Microsoft.

      The patents that were infringed apply to Windows and that applies across the board, desktops, laptops, tablets and Windows Phones.

      • wat

        No, you are clearly missing the point. Signing a contract with MS when they did not own a smartphone hardware manufacturing company =/= signing a contract when they did. It would have been a different contract and MS are bullshitting the court into believing otherwise.

        • RDF

          Of course you have a copy of contract?
          just go away

    • RDF

      go away troll

      • wat

        I take it you’re far too stupid to use logic or reason to disprove what I’m saying so you have to resort to shit talking. Get out moron.

  • Bugbog

    A Contract is a contract. As long as it was not negotiated in ‘bad faith’ it will stand up in Court. One can’t simply break contract and cry “Wolf” simply due to [the misfortune of] the opposing party now benefiting more than you from the result!