It seems Samsung may be getting a bit careless about paying its bills.
At least Microsoft thinks so the software giant is suing Samsung over
unpaid patent royalty payments. The lawsuit, filed Friday
in the U.S. District Court of the Southern District of New York,
describes patent royalty payments Samsung agreed to pay for using
Microsoft's technology in Android-based smartphones and tablets. The
amount Microsoft is seeking from Samsung wasn't named.
In the lawsuit and in a blog post by Microsoft's deputy general counsel David Howard, Redmond cited a confidential agreement reached between the two companies in September 2011 to cross-license their patent portfolios for various products.
The long and the short of it is that Microsoft claims Samsung stopped living up to its end of the deal last fall when the South Korean company refused "to make its Fiscal Year 2 royalty payment on time" and further refused "to pay interest on its late payment. Microsoft, meanwhile, says it has lived up to its end of its agreement to provide Samsung with unspecified remuneration for using Samsung IP in Microsoft products
Howard said Samsung was claiming the 2011 cross-license agreement had somehow been rendered void following Microsoft's acquisition of Nokia's handset business for $7.2 billion, a deal announced last September and completed in April.
"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," Howard said.
Howard also pointed to the rapid growth of Samsung's smartphone business as a possible factor for Samsung's supposed change of heart about the 2011 agreement. "Since Samsung entered into the agreement, its smartphone sales have quadrupled and it is now the leading worldwide player in the smartphone market," he said. "Consider this: when Samsung entered into the agreement in 2011, it shipped 82 million Android smartphones. Just three years later, it shipped 314 million Android smartphones. Samsung predicted it would be successful, but no one imagined their Android smartphone sales would increase this much.
Samsung did not immediately respond to a request for comment. However, PCWorld reported Friday that a Samsung spokesperson said "the company would review the complaint in detail and determine appropriate measures in response."
