Foxconn criticises Microsoft over patent lawsuit, says it never had to pay royalties

Foxconn doesn't need to pay royalties to Microsoft, claims founder and chairman Terry Gou

Taiwan's Foxconn Technology Group chairman Terry Gou has criticised Microsoft over the filing of a patent infringement lawsuit against it, saying it never needed to pay royalties to Microsoft for technology it contract manufactures for third parties.

In a press conference in Taipei, Taiwan Gou accused the software giant of targeting suppliers, rather than Google, and trying to extend its fading dominance of the personal computer era.

According to Reuters, Microsoft filed suit against Foxconn parent company Hon Hai on Friday, claiming unpaid royalties from Hon Hai for patents used in gadgets for various clients, including a big-name Chinese smartphone company.

The lawsuit was filed in the Northern District of California, and accused the Taiwanese consumer-electronics manufacturer of failing to comply with a patent-licensing contract from 2013.

Microsoft complained that Foxconn is not providing twice-yearly royalty reports about a number of unspecified products, and not paying royalty fees on time. Microsoft also stated that Foxconn had agreed to be audited by a third party in 2017, but has not provided any papers despite repeated requests.

It is not clear what devices were covered under the agreement between Microsoft and Foxconn, although Microsoft had claimed in 2013 that its agreement with Hon Hai covers Microsoft intellectual property embodied in Android and Chrome OS devices.

In the press conference on Tuesday, Gou said that "patent infringement" was not an issue for Foxconn, and that the company has "never paid any patent fees to Microsoft."

In a separate Facebook post, Gou said that Microsoft should earn patent royalties from vendors that use its software, not their contract manufacturers.

He also added that Microsoft is currently in dispute with Google about patents, but instead of targeting the internet search giant, it is suing subcontractors.

Gou went on to say that when the world moved into the smartphone era, Microsoft sought to prolong its PC era dominance - and continues to do so under CEO Satya Nadella.

Gou claimed that the software giant would not gain anything from the lawsuit filed in the court.

In a statement, Microsoft said that it takes its own contractual obligations very seriously and expects the same from other companies.

"Our working relationship with Hon Hai is important, and we are working to resolve our disagreement," Microsoft said.

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