Microsoft has a vast number of Android patent licensing agreements with device makers worldwide, but a Samsung court case has put a figure on exactly how much money the software giant makes from Android. Samsung paid Microsoft $1 billion in patent-licensing royalties last year, a huge sum that has the pair locked in a legal battle over contracts. Samsung originally signed two contracts — a cross-licensing agreement and a business collaboration agreement — with Microsoft in 2011, ahead of its impressive dominance of Android shipments, but late last year Samsung decided it was tired of paying on time, or paying interest when a late payment was finally made.
Two tech giants battle in court
Microsoft has taken Samsung to court over the issues, and the Korean company insists it wants to walk away from the original deal because of Microsoft’s purchase of Nokia’s phone business. Samsung claims the acquisition invalidates the business collaboration agreement, but Microsoft doesn’t agree and wants the company to pay $6.9 million in unpaid interest from last year. It’s clearly an awkward court case, especially as Samsung continues to build Windows-based smartphones, tablets, and PCs.
With $1 billion in annual royalties at stake, Microsoft seems confident it will force Samsung to pay what is owed. "We are confident that our case is strong and that we will be successful," Deputy General Counsel David Howard said in a statement on Microsoft's website. "At the same time, Microsoft values and respects our long partnership with Samsung, is committed to it, and expects it to continue." Microsoft may have convinced Samsung to switch to Word following a visit from CEO Satya Nadella, but a court will decide whether Samsung will pay up.
Update 10/4 5:25pm ET: This article has been updated to clarify Samsung's agreements with Microsoft.