Microsoft wants a judge to decide whether its recent Nokia acquisition should allow Samsung to stop handing over royalties on Android devices. Since 2011, Samsung has been paying out per-device royalties to Microsoft for every Android product it sells. Microsoft has struck similar deals with many Android OEMs, and it's been a lucrative endeavor. But apparently late last year, the dominant Android manufacturer decided it was tired of paying on time, or paying interest when a late payment was finally made.
"We have a fundamental disagreement."
"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," wrote David Howard, Microsoft corporate vice president, in a blog post today. Microsoft says Samsung's incredible rise in the smartphone market is likely the reason it no longer wants to pay up. "Samsung predicted it would be successful, but no one imagined their Android smartphone sales would increase this much," wrote Howard.
But Samsung insists it walked away because of Microsoft's buyout of Nokia. Redmond acquiring its own handset business invalidated the cross-license IP agreement, according to Samsung. Microsoft obviously disagrees, and it's hoping a judge will affirm its belief that the deal still stands and remains legally binding. "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," Howard said. Microsoft says it "values and respects" its longtime relationship with Samsung and doesn't expect this court battle to damage it. "We are simply asking the court to settle our disagreement, and we are confident the contract will be enforced," said Howard.
In a statement, Samsung said only it was evaluating Microsoft's claims. "We will review the complaint in detail and determine appropriate measures in response," the company told The Verge.
Update August 1st, 6:43PM: to clarify the timing of Samsung paying its royalties, and to link to the complaint.
Update August 1st, 7:28PM: with comment from Samsung.