Microsoft sues Samsung over Android royalties

Microsoft sues Samsung over Android royalties

Some may not understand why Samsung would owe Microsoft any money for its Android devices.

Samsung is going back into the courtroom, but this time, the company will not be fighting Apple. Instead, the battle will play out against Microsoft, which claims that Samsung owes it royalties on the sale of Android mobile devices.

Indeed, according to a report published on Friday by The Verge, Samsung and Microsoft have an agreement in place where the former has to pay the latter a per-device royalty rate on every single Android phone or tablet it sells. Given the recent popularity of the Samsung Galaxy S5, Microsoft is likely hoping to collect a pretty penny in Samsung royalties.

Some may not understand why Samsung would owe Microsoft any money for its Android devices. After all, the Android operating system is developed by Google, not Microsoft, and Samsung is not owned in any part by the Redmond, Washington-based software company. But Microsoft owns patents on numerous technologies used in the Android platform, and has struck deals with several Android phone developers to receive royalties for the usage of those technologies. Samsung, being the most successful manufacturer of Android devices, is likely Microsoft’s richest source of device royalties.

Sometime last fall, though, Samsung decided that it was going to stand up to Microsoft and stop paying royalties. Samsung argued that Microsoft’s acquisition of Nokia invalidated the original cross-licensing contract, since it saw Microsoft trying to gain a more substantial foothold in the handset production business.

Microsoft, on the other hand, thinks that Samsung decided to stop paying just because the Galaxy line got so big, forcing the company to pay up more in royalties than it ever expected. Still, Microsoft is adamant that the contract with Samsung remains legally binding, the Android royalty stipulation included. To prove this point, Microsoft is taking Samsung to court, hoping that a judge will help to settle the disputes between the two companies and interpret the contract one way or another.

“We don’t take lightly filing a legal action, especially against a company with which we’ve enjoyed a long and productive partnership,” David Howard, Microsoft’s deputy general counsel wrote in a blog post on Friday. “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.”

Samsung has not yet issued a firm comment on the lawsuit, but has said that it is reviewing Microsoft’s claims and trying to determine which action to take next.

 

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