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Microsoft Goes After Samsung for Non Payment Of Royalties

Microsoft Goes After Samsung for Non Payment Of Royalties

On Saturday Australian time Microsoft filed a lawsuit against Samsung in a Manhattan federal court for allegedly failing to keep up its end of a contractual agreement regarding the payment of royalty payments.

 Samsung believes that Microsoft’s acquisition of Nokia, completed in April, breaches the agreement that the Company had in place with Nokia, Microsoft disagrees.

In 2011, Microsoft moved to demand that smartphone vendors pay the US software Company royalties for every Android-based device sold. Several smartphone vendors paid up but not Samsung. 

Samsung made its royalty payments to Microsoft during the first fiscal year after they signed their 2011 agreement, the lawsuit said.

 However, after Microsoft announced the Nokia deal last year, Samsung initially refused to make another payment, the lawsuit said.

In refusing to pay Microsoft, Samsung argued the Nokia deal breached Microsoft’s licensing agreement with Samsung, the lawsuit said. Samsung eventually paid Microsoft late, the lawsuit said, but has refused to pay interest.
Samsung also claims smartphone products sold by Microsoft after the Nokia deal are not covered by the licensing deal, the lawsuit said. Microsoft has asked a judge to make an opposite finding.

In a blog post on Saturday, Microsoft deputy general counsel David Howard wrote that Microsoft “values and respects our partnership” with Samsung, but differs with Samsung over how to interpret the licensing agreement.
“Unfortunately, even partners sometimes disagree,” Mr Howard wrote.