Microsoft has filed a contract dispute suit against Samsung over what Microsoft claims is a breach of contract by Samsung involving Android patent royalties.
Microsoft filed its complaint against Samsung in U.S. District Court in the Southern District of New York on August 1 following what Microsoft claims to have been "months" of attempts between the two companies to resolve their dispute.
Microsoft is seeking a ruling as to whether its acquisition of Nokia's handset and services business negates its intellectual-property licensing agreement with Samsung that dates back to 2011. Microsoft also is seeking unpaid interest from Samsung, resulting from the period of time last year when Samsung withheld patent royalties from Microsoft -- royalties which Samsung later paid.
"Samsung has made clear in a series of letters and discussions that we have a fundamental disagreement as to the meaning of our contract," said David Howard, Microsoft Corporate Vice President and Deputy General Counsel.
The contract in question is the September 2011 multi-year IP agreement Samsung signed with Microsoft via which Samsung has been paying Microsoft per-device royalties for its Android phones. Under that 2011 agreement, Samsung and Microsoft agreed to cross-license their intellectual property, with Samsung paying Microsoft an undisclosed amount for each Android-based phone and tablet it sold.
Based on Microsoft's blog post, Samsung decided late last year to stop paying Microsoft per-device royalities, using Microsoft's acquisition of Nokia's devices and services business as the stated reason. It's not clear from the post why Samsung contended the acquisition invalidated the contract.
Update: Samsung and Nokia in November 2013 agreed to extend heir own patent-licensing deal through 2018, with Samsung paying Nokia undisclosed royalties. That extension was forged after Microsoft announced intentions to buy Nokia's handset business, and a few months before Microsoft officially took possession of that part of Nokia.
According to Microsoft's August 1 blog post, Samsung was shipping 82 million Android smartphones a year in 2011. Now it is shipping closer to 314 million, company officials said, citing IDC data.
"Samsung predicted it would be successful, but no one imagined their Android smartphone sales would increase this much," Howard contended in the blog post.
"Microsoft and Samsung have a long history of collaboration. Microsoft values and respects our partnership with Samsung and expects it to continue. We are simply asking the Court to settle our disagreement and we are confident the contract will be enforced."
Samsung is one of the more than 20 vendors with which Microsoft has signed Android and/or Chrome OS patent licensing agreements in the past few years.
Update 2: In a statement, Samsung said it will "review the complaint in detail and determine appropriate measures in response."