Microsoft sues Samsung over unpaid royalties

Suit claims that Korean electronics giant has refused to pay for Microsoft IP

Tags: Microsoft CorporationSamsung Corporation
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Microsoft sues Samsung over unpaid royalties Samsung claimed that Microsoft breached the contract with its acquisition of Nokia (Peteri/Shutterstock.com)
By  Tom Paye Published  August 3, 2014

Microsoft filed a lawsuit against Samsung on Friday, claiming that the South Korean electronics giant has refused to pay royalties of Microsoft-owned intellectual property (IP).

The suit alleges that Samsung and Microsoft signed an IP contract in 2011, and that Samsung initially stuck to the contract. However, Samsung stopped paying after Microsoft made public its plans to acquire Nokia's devices business, claiming that Microsoft had breached the terms of the contract, the suit says.

However, in a blog post on Friday, David Howard, Microsoft's corporate vice president and general counsel, said that Samsung "knew its position was meritless."

"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," he wrote.

"Curiously, Samsung did not ask the court to decide whether the Nokia acquisition invalidated its contract with Microsoft."

Howard accused Samsung of thinking it could stop complying with its agreement with Microsoft, simply because, from 2011 to 2013, it became the biggest smartphone vendor in the world.

"Samsung predicted it would be successful, but no one imagined their Android smartphone sales would increase this much," he said.

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

According to reports, the suit admits that Samsung eventually paid Microsoft the royalties that it owed. But because the payment was so late, Microsoft now claims that it is owed interest. No figure was given on the lawsuit - Microsoft said it simply wanted to enforce its contract with Samsung.

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