Reports have emerged that Microsoft Corporation, a software giant is suing Samsung to claim unpaid interest on patented royalties. According to reliable and well placed source that is privy to the proceedings, Microsoft is throwing in for a good-measure a huge sum of undisclosed damages. The fall out is said to be emanating from an agreement which was entered into by the two companies in 2011 which provided for cross licensing of the two companies and where the Korea based Samsung agreed to remit royalties to every android devoice which it sold.
Microsoft Corporation, in the suit papers stated that it is the patent owner of the hundreds of the technologies which form part of Android, including the technique which is used to display several windows in an online browser as well as the plug and play device which is used for redirection of remote devices. But instead of fighting Microsoft, more than 25 Microsoft OEM’s have opted to sign licensing agreements for patents, just like the one which had been signed by Samsung and Microsoft in 2011.
In 2013, Rick Sherlund who works as an analyst with Nomura Securities estimated the amount which Microsoft gets from android royalties to be in the tune of $2 billion. This is according to reports carried in the Wall Street Journal. Immediately Microsoft acquired full control of Nokia in September, Samsung made a claim that it’s earlier agreement with Microsoft had been invalidated and because of this, it started withholding its royalties.
The OEM changed its stand and continued remitting its royalties even when it still maintained its ground that the acquisition of Nokia makes the contract invalid. However, it didn’t emit the interest which it was supposed to pay for the entire period which it was withholding the funds. And how much is at stake here has not been disclosed. However, the minimum threshold of the Southern District-Court of New-York where the Microsoft Corporation has filed the case has a threshold of $75,000 on the lower side. This could provide a hint that the amount which is at stake is colossal.
According to David Howard, the deputy general counsel for Microsoft, the hardware maker waited for far too long until it became the world’s biggest player in the Smartphone market before it started complaining and subsequently stopping the agreement which they had earlier entered into with Microsoft. Howard further stated that Samsung used acquisition of Nokia just as an excuse to breach the contract which it had signed with Microsoft in 2011. “It draws curiosity that Nokia didn’t ask the court to make a determination as to whether the acquisition of Nokia invalidated contract which it had entered into with Microsoft Corporation in 2011, most likely because Samsung knew its position did not have merit”.
Indeed, Microsoft is asking the court to halt Samsung from using acquisition of Nokia to justify its postponing or stopping future royalty payments or stopping the operation of the agreement altogether. According to PC Pro it, Samsung said it will do a review of the suit in detail and come up with the best response.