Microsoft sues Samsung over Android agreement
Computer software company Microsoft has taken legal action against South Korean conglomerate Samsung for allegedly breaching a contract covering patent royalties.
As part of the cross-licensing deal, signed in 2011, Samsung agreed to pay Microsoft royalties for any phones or tablets running the Android mobile platform.
But after Microsoft acquired Nokia’s mobile handset division earlier this year, Samsung allegedly stopped honouring the agreement.
A spokesman for the South Korean company said: "We will review the complaint in detail and determine appropriate measures in response."
After Microsoft filed suit at the US District Court for the Southern District of New York on Friday (August 1), David Howard, deputy general counsel, said the company does not take legal action lightly, “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,” he said.
Since 2011, claimed Howard, Samsung’s smartphone sales have quadrupled, and, after become the leading smartphone company globally, it decided late last year to stop complying with the companies’ cross-licensing agreement.
The sticking point, he argued, was Microsoft’s decision last year to buy Nokia’s devices and services business. It agreed to buy that division for €3.79 billion ($5.09 billion) as part of a €5.44 billion ($7.30 billion) buyout of the Finnish company’s mobile phone business, with the deal closing in April.
According to Microsoft’s lawsuit, Samsung claimed the Nokia acquisition breached their agreement in “various” ways, and the South Korean company’s decision not to honour the contract any longer is “extraordinary”.
Among other things, Microsoft wants damages for late royalty payments and a declaration that Samsung cannot terminate the cross-licensing agreement because of the Nokia deal.
Howard said: “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 dispute sheds more light on Microsoft’s Android licensing programme, which is widely regarded by lawyers as successful. Although the platform was launched by Google in 2008, Microsoft owns patents covering the technology, allowing it to strike licensing deals with Android operators.
More than 26 companies, including HTC and ZTE, have signed up to the Android licensing programme to date. Microsoft claims that Android-based smartphones account for nearly 80 percent of smartphones worldwide.
