Even though Microsoft isn’t making any popular Android devices of its own, the giant Windows maker is still milking a lot of cash from Android device sales, as the company inked more than a few licensing agreements with all sorts of OEMs that sell Android smartphones and tablets for a living. According to existing reports, Microsoft is reportedly making over $2 billion a year from those licensing deals, and the number could go up to $8.8 billion a year by 2017. However, Samsung, the most important Android device maker doesn’t want to pay the bills anymore, and, unsurprisingly, Microsoft took legal action against the South Korean corporation.
Unlike with Apple, whom it fiercely fought in various courts across the glob in a complex patent spat, Samsung agreed to pay a patent licensing fee to Microsoft in 2011, which it honored since then until September 2013, when it stopped payments, with Microsoft identifying its Nokia purchase as the reason invoked by Samsung to stop paying royalties.
“Samsung and Microsoft are both large and sophisticated companies,” Microsoft wrote on its blog. ”In 2011, after months of painstaking negotiation, Samsung voluntarily entered into a legally binding contract with Microsoft to cross-license IP – an agreement which has been extremely beneficial for both parties. Samsung had been complying with the contract and paying to use Microsoft’s IP.”
“After becoming the leading player in the worldwide smartphone market, Samsung decided late last year to stop complying with its agreement with Microsoft. 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. 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,” the company added.
It’s not clear how much money Samsung pays to Microsoft – and the same thing can be said for any other Android device maker who has an agreement with Microsoft – but it’s clear the Redmond-based company won’t simply let Samsung get away with it.
“We don’t take lightly filing a legal action, especially against a company with which we’ve enjoyed a long and productive partnership,” Microsoft said. “Unfortunately, even partners sometimes disagree. 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.”
