Microsoft claims Samsung refused to pay IP licensing fees because of Nokia buyout
Microsoft has opened legal proceedings against Samsung, accusing the Korean manufacturer of failing to pay patent licensing fees that the firms had agreed on in 2011.
The computer giant has accused the mobile manufacturer of trying to end royalty payments following Microsoft’s acquisition of Nokia in September. Samsung has to pay a fee for every Android handset they sell as part of a cross-licensing agreement.
According to a Microsoft blog post, Samsung stopped making the payments in September last year and refused to make the required late payment fees as well, allegedly claiming via correspondence that the Nokia buyout put Microsoft in breach of the contract. This prompted the American firm to take action.
Microsoft’s corporate vice president David Howard said in the post: “We don’t take lightly filing a legal action, especially against a company with which we’ve enjoyed a long and productive partnership. Unfortunately, even partners sometimes disagree.
“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.”
Howard claims that Samsung’s success in the smartphone market has contributed to their stance on the payments. Samsung are the largest smartphone manufacturer in the world, with 25 per cent share of devices sold during their second quarter this year, according to research firm IDC.
“Samsung predicted it would be successful, but no one imagined their Android smartphone sales would increase this much,” wrote Howard.
The alleged refusal to pay, and correspondence from Samsung indicating that it the acquisition of Nokia has invalidated the agreement, has forced Microsoft to refer the disagreement to U.S. District Court, Southern District of New York.
Howard added: “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.”
The court filing is heavily redacted and Samsung have yet to respond to the action.