Microsoft sues Samsung over 2011 patent cross-license agreements

By Graeme Burton
05 Aug 2014 View Comments

Software giant Microsoft is suing Samsung over claims that the South Korean conglomerate has breached a 2011 patent cross-licensing agreement.

The agreement was intended to prevent the two companies from heading to court over smartphone and other technology patents - in the same way that Apple and Samsung have clashed.

The agreement meant that Microsoft earned royalties from Samsung for mobile devices over US patents owned by Microsoft. The two companies also agreed to develop Microsoft's Windows Phone operating system, although Samsung has produced only one or two Windows Phone devices since then.

However, Microsoft is claiming that Samsung is using Microsoft's April acquisition of Finland's Nokia, once the world's runaway leader in mobile phones, as an excuse to justify termination of the contract.

Microsoft claims that Samsung stopped making royalty payments on time after the Nokia deal was announced late last year and is refusing to pay interest for late payment.

"We don't take lightly filing a legal action, especially against a company with which we've enjoyed a long and productive partnership," wrote Microsoft deputy general counsel David Howard in a company blog.

He continued: "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."

The Microsoft acquisition of Nokia is central to Samsung's argument, claimed Howard.

"After becoming the leading player in the worldwide smartphone market, Samsung decided late last year to stop complying with its agreement with Microsoft.

"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," wrote Howard.

Samsung, however, is remaining tight-lipped. "We will review the complaint in detail and determine appropriate measures in response," Adam Yates, a spokesman for Suwon, South Korea-based Samsung, told Bloomberg in an e-mailed statement. 

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