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August 4, 2014

Microsoft-Samsung Android royalty row goes to court

Microsoft sues Korean electronics giant for refusing to pay royalties.

By Vinod

Microsoft is taking Samsung to court over the Korean electronics giant’s alleged failure to honour a patent licensing deal signed by the two companies three years ago.

Microsoft has accused Samsung of failing to pay royalties on time and is miffed over the latter’s refusal to pay interest for the delay.

As per the cross-licensing agreement signed by the two companies in September 2011, Samsung was required to pay a set royalty each month to Microsoft for every Android device it sells.

The royalty payments are required because Microsoft holds the patents for various technologies that appear in Android, including methods for displaying multiple windows in a web browser, and plug-and-play device redirection for remote systems.

Over 25 Android device manufacturers have also signed similar patent licensing agreements with Microsoft. It is estimated that Microsoft earns more than $2bn in royalties from global Android smartphone makers per year, with Samsung paying the largest amount of annual royalties.

Samsung apparently stopped making payments since Microsoft acquired Nokia last year, contending that the deal made Microsoft a smartphone manufacturer itself.

Samsung also objected to Microsoft’s condition of extending the cross-licensing agreement to Nokia, saying that the original deal is limited to Microsoft and a new agreement needs to be forged with Nokia.

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Microsoft, in turn, accused Samsung of "simply looking for an excuse not to pay royalties."

The amount of money at stake has not been disclosed.

It is believed that the lawsuit will not sever ties between the two firms as they have been partners for a long time, but if Samsung wins the case, all Android manufacturers signed into the same contract could also break free, leading to a huge loss for Microsoft.

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