The complaint alleges Samsung is balking at making payments for patented Microsoft technology used in its Android phones and tablets.
Microsoft on Friday fired a legal salvo at longtime partner Samsung, condemning the South Korean giant of breaching a contract over licensing of technology used in the competitive smartphone market. “After becoming the leading player in the worldwide smartphone market, Samsung decided late last year to stop complying with its agreement with Microsoft,” the US technology firm’s assistant counsel said in an online post.
The complaint filed in centralized court in New York alleges Samsung is balking at making payments for patented Microsoft technology used in its Android smartphones and tablets.
“We will review the complaint in detail and determine apposite measures in response,” Samsung told AFP.
Microsoft contends the South Korean shopper electronics colossus is not adhering to a contract from 2011, and said it filed the court action after months of “painstaking negotiation.” The legal pact involved Samsung paying to use Microsoft intellectual property, according to the post by deputy counsel David Howard.
Samsung’s smartphone sales have quadrupled since the contract was signed as the company grew from shipping 82 million Android-powered handsets in 2011 to shipping 314 million three years later, Microsoft maintained. Samsung has become a smartphone Goliath, and the biggest maker of handsets powered by Google’s free Android software.
“Samsung predicted it would be successful, but no one imagined their Android smartphone sales would increase this much,” Howard said. After Microsoft made a deal last year to buy Nokia’s smartphone business, Samsung stopped enduring by the cross-licensing contract, the US company says.
Microsoft said in the filing that Samsung used the Nokia business acquisition as grounds to step away from the licensing deal. Microsoft closed the deal for Nokia’s smartphone business in April with some adjustments from the announced price of $7.52 billion.
Microsoft said that Android software incorporates some of its patented technology and the company’s practice is to license the intellectual property to handset makers.
Samsung has been a longtime Microsoft partner, making an array of computing devices powered by the US company’s software, including a version of Windows for mobile devices.
“Microsoft values and respects our partnership with Samsung and expects it to continue,” Howard said. “We are simply asking the court to settle our disagreement, and we are confident the contract will be enforced.”
Microsoft said this was the first time it has sued Samsung and that its intent is to keep getting royalty money due under terms of the contract, along with interest charges for late payments. “Unless one side or the other screwed up in writing the contract, I don’t know what Samsung is thinking,” said Silicon Valley analyst Rob Enderle of Enderle Group.
“I am at a loss to understand why Samsung stopped paying the money.” Microsoft’s track record leaves little doubt it would fight to enforce a legal contract, according to the analyst.
If anything, buying Nokia’s smartphone business would strengthen Microsoft’s intellectual property portfolio not weaken its position, Enderle reasoned.