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Microsoft has filed legal action against Samsung today in New York on the basis that Samsung has stopped paying to license intellectual property from Microsoft for its Android devices.

Since 2011 Microsoft and Samsung have held a cross-licensing agreement that has shared the rights of intellectual property between the two companies, with fees associated to using that IP on Android devices. But according to Microsoft's legal team, Samsung stopped making payments in late 2013 for the technology. Corporate Vice President & Deputy General Counsel for Microsoft, David Howard, had this to say:

"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."

Samsung's argument in all this, according to Howard, is that the cross-licensing agreement no longer applies since Microsoft announced that it was going to acquire Nokia. Microsoft claims, of course, that Samsung's decision to stop paying licensing fees, regardless of the reason, is in breach of their contract with Microsoft.

Howard notes that Samsung has more incentive now to not pay Microsoft on a per-device basis, pointing out the fact that shipments of Samsung Android devices have quadrupled since the two companies first agreed to licensing terms.

The legal filing itself has not yet been made public, and we really only have one side of the story here with no official statement from Samsung. You have to think that if Samsung had any reason at all to think it was no longer required to pay licensing fees for each and every Android phone it sells, it would stop doing so — its responsibility to shareholders is to make as much money as possible, after all.

This will not end simply, we're sure.

Source: Microsoft Blog

 

Reader comments

Microsoft claims Samsung isn't paying up on patent licenses for running Android

150 Comments

What's your reason for wanting Samsung to decline? Simply Because you enjoy Microsoft products, weird.

Posted via Android Central App

Yeah...those billions made from Android software must mean its a gimmick.

Remind me again of those what...thousands of dollars made from that feature phone called WP.

I think almost everybody can agree on that.

Anyhoo, I wonder if this action by Samsung is done because Lenovo spilled the whole patent list out on the internet earlier this year, meaning it's gotten a lot easier for other third parties to make counter claims to that list?

I wonder what the world will be like if Microsoft loses...

Posted via the LG G2 Android Central App

Better? Android oems pay a ton to MS, AND for them to lose this would be epic. Maybe even knock $50 off the price.

Wouldn't hold my breath there

Posted via Android Central App

Losing Microsoft is like losing the next 50 years future updates. We cannot depend only on Google and Apple. These 3 are actually our tech savvy future companies. They actually work together just that we don't see it. Losing Samsung is OK, nothing to lose as there many other great phone makers. Samsung can just make televisions to survive. Lol!

Posted via Android Central App

I think my personal reason is I'd like to see the US return to producing something that competes with overseas manufacturers again. Made in the USA, is as rare today as "Made in China" was when I was a kid in the 70's. Everyone laughed at Honda and their car wrapped motorcycle engines, we all ate sugar, butter, and wanted to buy the world a coke. Funny as it sounds today to even say it.

My professional reasons is that you can't just decide you're not going to pay up. Sure you have chapter 7 protection. I'm not arguing hardship. But Samsung (who makes beautiful tv's by the way) is not having any hardship. I'm eager to see why Samsung decided not to pay up. But you can't just say "we're too big, we don't need to honor the contract".

Also, I'm a huge fan of tech. All tech. I am platform agnostic. I have an iPad, a Windows Phone, several PC's, a hackintosh (because I'm not going to pay for what I can build, sorry Apple. I still paid for the software license), OnePlus One, and I'm eyeballing the iPhone Air. I love android even though Google scares me a little.

Lastly, If you haven't tried windows phone, you're missing out. It's not android certainly, and it has growing to do. But think back to Android Doughnut, Eclair, even Froyo, and compare that to what Apple was providing. MS is doing amazing things with WP8+. I've yet to see any android device compare on the basis of communications (not apps folks, actual communicating with another person via voice, email, or text), battery life, readability, visibility. Every platform has its advantages, I understand that. But being close minded to any one platform is, in my opinion, a short sighted mistake.

If you made it this far, you get 2 points.

First of all, woot 2 points for me.

Second, they're claiming that Microsoft ended the licensing agreement by acquiring Nokia (which I'm guessing is because it put them in direct competition?). Now I have not read their contract obviously so I don't know if this holds any ground, but if it does, that would mean they continued to pay them for years even after the fact and then eventually decided enough was enough. Like I said, I don't know if I agree with this because I don't know what's in the contract, that's just what the article stated as their grounds.

On your next note, I'm a huge tech fan too. I have tons of Apple, Microsoft, and Android products, and in the Android world I jump between all the different manufacturers. I have no bias. And I have used Windows Phones, recent ones, and I just didn't think they were up to snuff with Android or Apple. I don't think they should just quit, because I love options and competition. But they will definitely have to improve A LOT before they can expect to gain anymore market from the big guys.

First, the two of you need to cut the reasonable discussion. You are giving the internet hope.

Second, I think you went half way on the MS/Samsung contract sorta. I think that the Nokia buy gave them a reason to break the contract, but Samsung needed the time to find a way to get around the patents when this happens (MS suing over the contract) thus the gap

Your mistake is that you don't seem to care who's right or wrong, you just want Samsung to lose.

Posted via Android Central App

Microsoft is a sad joke that all platforms laugh at what a waste of time and money for those products.

From my Galaxy Note 3 on Tmobile via Android Central App

Wow, sure. That's why Microsoft IS larger than Samsung.
PS: Funniest thing is, you're probably running Windows in your computer. At least Samsung computers do.

But then we could just forget about his comment since nothing says waste of money like a Chromebook. A Samsung Galaxy Tab can do more than that.

You require Microsoft software to root Android or back it up.Sad but true.I can connect my Nexus 7 to a Windows 8 tablet to root it.Is vice versa possible? Nope

Posted via Android Central App on Google Nexus 7 2013

You mean to use fastboot and adb? I'm pretty sure I've already done that on Linux.

Posted via Android Central App

You really really don't, specially not with a Nexus 7... You could root that from Linux or even a Mac I'm sure.

I've got no ill will towards Windows btw, you can take Windows from my cold dead hands the day there's another OS tha's even remotely as flexible for gaming (everything else would kinda fall in place, except maybe Adobe but yeah). Steam OS looks promising (just Linux really), but they're gonna need to attract a lot more dev support.

Regardless, Android and Chrome OS have needed to rely very little on a desktop OS over the years, even iOS was far more shackled to a desktop OS/sync of some sort in the past.

Where gaming is concerned, that is all up to companies like EA. if Linux did become popular it would be pretty easy for them to make the switch considering the fact that Linux is more flexible than Windows. Have you ever seen Playonlinux? Ever heard of Wine? Linux is so flexible that I could even run Internet Explorer (shudder) on it. I definitely have to admit that Microsoft Office for the time being is the best office suite. That's why I run it on Linux if I need to get certain things done in a word processor. windows might be more flexible than OSX (I'm really not sure because I haven't used that OS much) but nothing is more flexible than Linux at anything.

It's largely up to the development houses and the big publishers, BUT not entirely. DirectX played a huge role in making gaming easier (for both the user and developer) and more viable or attractive on Windows. OpenGL is ok, but there's still a ton more tools that developers use that run on Windows to begin with and are putting out DirectX code paths for the most part. Native engines developed for Linux is the only thing that's gonna lead a changing tide, and it's not gonna happen without something like SteamOS to spearhead it.

Wine etc aren't really viable solutions, I'm not spending $700 in video cards and $200 in PSU to get 75% of the performance out of it... Might as well spend half as much for the same performance on Windows. Last I checked Wine didn't even support the latest version of DirectX and DX12 is around the corner. I'm sure it's fine for casual or older games, but that isn't the sort of halo product that drives a platform.

Direct x is one tool. It most certainly is possible to develop an equivalent for Linux. As I said before, it all depends on how popular the platform is. Windows is far more popular than anything else. If Linux became as popular as Windows don't you think that game development would take off? This is the same scenario that Windows phone is facing. Despite being just as capable as Android at running games, you don't see as many titles on windows phone. For the most part, I think we definitely agree.

No you don't. I can unlock, root and flash my Xperia phone and never have to boot Windows. Uptime on my Linux laptop stretches to weeks, only needing to reboot for rare security patches.
With Samsung, I've not found a Linux version of Odin I'd trust.

For now everybody needs Microsoft...Windows. Fact! Period! Unless you don't a PC.

Posted via Android Central App

I have oneplus one too! You have problems with your mms? Havn't been able to send any, on att. Tried changing apn and still nothing. Very frustrating....

Posted via Android Central App

With 2.7% market share for WP, I think M$ realized that they are never going to make anything from mobile apart from these patents.

Just the fact that you have a 1- is enough to disregard your rubbish statement. I don't actually think you have one, unless you are in China. They are a myth

Posted via Android Central App

This is partly why Google took micro-sdcards out of Nexus Devices.

Posted via the LG G2 Android Central App

This is stupid if you ask me. It's like saying that my desktop shouldn't have extra storage unless I pay Microsoft. It really is. Did Microsoft invent the SD slot?

For all the money thrown at Microsoft because of FAT and then exFAT, it would have been cheaper to have ported ext3 and ext4 file system driver to Windows.

You jumped to a conclusion.

It does not say (that I read, please tell me if I am wrong) that it stopped paying for all patents. THey very well could be paying that one (like LG, HTC, Sony, Sandisk whoever)

And why would Microsoft be the "bad" one here? Samsung is the one not paying what they agreed. Patent royalties are an important part of intelectual properties. Just because this is Android Central it doesn't mean that whatever isn't Android is bad. Quit fanboyism.

It really depends on the patents on question. A lot of patents are BS because the USPTO is underfunded and doesn't properly assess the validity of patents (this may well apply to other country's patent offices too).

It depends on whether they really are valid patents and if they really apply to the devices Samsung sells. It might be the case that Samsung made the agreement because it was cheaper than fighting Microsoft in court, but now that Samsung sells a lot more Android devices it is now worth challenging Microsoft.

Microsoft has a long history of being the bad guy, that doesn't automatically make Samsung right here, but I won't give them the benefit of the doubt.

Posted via Android Central App

Right, rounded corners is a perfect example....of the opposite of what you are trying to say and of what the OP was saying.

No. The iPhone design patent is owned by Apple. The Galaxy S clearly resembles an iPhone. I used that as an example that Samsung infringed patents before.

It shows how broken the patent system is in the US. Apple did not come up with that design first, there is prior art, but sued on those grounds (among others). That is why I said that you were proving the OP right.

Because they bought Nokia? Even Samsung doesn't put it as an excuse since they know it's not valid. Modify themselves opened the possibility, dismissing it as it wasn't part of the agreement. Samsung can't do what it wants.

Read the complaint that Microsoft filed and read the statement that Samsung gave to the Verge. Google it. Also, I meant Microsoft not Modify. It was autocorrect.

Yes. They say it was given to them but not to court since Samsung hasn't reached the court to ask if the Nokia deal invalidates the agreement. And Microsoft dismisses it as an excuse.

Of course they dismiss it, they are supposed to since they feel they are in the right. What should they do say "Samsung has valid grounds"?

No. But they dismissed it entirely as part of the contract they didn't call it an interpretation.Besides, if Samsung felt the contract was broken. They would have said it long ago instead of skipping payments and refusing to pay interests. I will not answer any other message since I have a life.

...and a losing argument.

They paid until they found a way around some of the patents (I believe).

If you feel that you do not owe a payment you are certainly not going to feel obligated to pay the interest on a payment

Well, they literally stopped obeying the terms of their contract, if that's not a winning argument Idk what is
Now stfu ;)

Posted via Android Central App

I hope MS realizes their patents won't last forever. I think it was because of Nokia being acquired that Samsung realized that they're basically throwing money into a competing phone manufacuter. That's probably why they stopped paying.

Either way, Samsung is on the losing side.

I think Microsoft does realise that their patents won't last forever, hence why they're willing to fight Samsung to milk all the cash they can out of them

Posted via Android Central App

What? So you stop your legal obligations because the person you are paying decided to buy a hardware company and you did not even go to court. WTF is wrong with some people these days that's some bullshit excuse. The chinese oem's will eventually take care soon enough.

Because the clause is up for deliberation and interpretation apparently, and the courts will now have to spend time figuring it out. Next time someone owes you cash and they decide not to pay, let us know how you feel about that.

Since the clause was broken long ago by MS, I am sure that Samsung has thought this cunning plan through and gotten around whatever patents they were infringing on.

The case here will hinge on if MS broke the contract in the first place.

There will be a separate court hearing about the patents.

But it's there a clause. Do you have the agreement to corroborate? It could be something that Samsung is interesting although it isn't there, or it might be Microsoft dismissing a clause. Either way, the jury will decide, asked even then it could be unfair.

The way I understand it is that Samsung claims Microsoft's purchase of Nokia violates a non-compete clause in the licensing contract, which rendered it void. No need to go to court, no more obligation. MS obviously doesn't feel this way.

Let the courts handle it. The fact Microsoft makes more money in android license than they do in their own windows phone is pretty telling.

Like that fact that Google makes more money with iOS than with Android is pretty telling too.

PS: Not sure if this fact is still valid. It was a little more than a year ago.

It's sad, because I actually kind of like Windows Phone. Android and iOS are just too well-established for any other OS to really take off for a good long while, though. I'm afraid WP will only last as long as MS is willing to keep throwing good money after bad.

Well they are on the path to making it one OS that can be used on traditional PCs, tablets, and phones, so it shouldn't be too much of a problem keeping it around going forward.

And a unified, cross-platform OS would be great, but the problem is that no one's buying WP phones. Phone hardware development isn't free, and the only company that's really making WP devices now is Nokia, which is owned by MS. When a division of a company spends a lot more money than it brings in, it eventually gets the ax, no matter how badly the higher-ups want to make it happen.

WP 8.1 just got official devices a few weeks ago, the manufacturers will come eventually. HTC is having their windows phone leaked all over the internet.

Seems like that axe came earlier than we thought when MS CEO Satya Nadella layed off 18,000 jobs, two-thirds of the cuts coming from the Nokia mobile phone division.

LG, Lenovo, Sony, HTC, (and Samsung was), building a windows phone. Microsoft has the ability to flash Android devices with WP. Imagine downloading a cyanogenmod-like installer from google play to flash your old htc-one with Windows phone 8.1? Then having Cortana follow you between your phone, PC, tablet, and Xbox, controlling your Insteon powered home? OneCore I think they called it, the same kernel powering all platforms. Should make things easy to develop one app for everything. I'm definitely interested anyway.

Yea that would be quite amazing if it ever sees the light of day. I'm definitely interested as well. But WP as it is is not going in the right direction sadly.

Windows phone will be around for quite awhile.It may never overtake the others,but don't think for a second that they will abandon it.

Samsung will loose in court with Microsoft,regardless what most people think of them. Then they will try to negotiate a settlement with them.

It's just how they do things.

Samsung has to renegotiate their contracts,because of Tizen,and because of them losing as much revenue as they have.
If the shoe was on the other foot,and if Samsung was having to sue Microsoft,most people here wouldn't have a issue with that happening at all......very strange.

Posted via Android Central App

Don't think Microsoft will abandon WP. Will just keep upgrading and sell like their Windows. Losing and winning its just business I guess. Universal app DEVELOPERS maybe will save Microsoft.

Posted via Android Central App

...and they will for quite a while. The Mobile world reminds me a lot of what they did with the Xbox.

Pretty telling of what, Microsoft being a savvy business? They made millions off quietly settling with most Android OEM out of court while Apple spent millions in court. In the end it's probably a drop in the bucket for either company but at least MS had a clear goal in mind, payday, not this concept of obliterating your competition in thermonuclear war because how dare they copy from us while we copy from everyone else...

If Samsung in not honouring their part of the agreement, why should they win?

Posted via Android Central App

close. The problem there is that both are usually evil.

It is more like I dislike the Penguins, but hate the rangers so I always want the Pens to win that game.

And for Crosby to cry but that is another issue

/Flyers fan

Samsung hasn't refused to pay. Android Police says "Microsoft's PR agency reached out to clarify that the lawsuit is not over a failure to pay, but merely a failure to pay on time and with accrued late payment interest."

Posted via Android Central App on Google Nexus 7 2013

Oh, so they stopped paying in late 2013 and their just late.... Yeah Right they are in default and negotiations have failed. It is a little more than "just late"

Posted via Android Central App from my HTC M8

I do follow wpcentral, was an iOS user. Windows phone has Nokia but still lags behind other platforms. I love windows 8, have dell venue 11 pro and it is awesome! Got to try out a surface pro 3 today, really awesome device! Look forward to what else Microsoft has to bring.

Posted via Android Central App

So, without these license fees, Microsoft would be out of business right now, right?

Posted via Android Central App

Which Microsoft cash in: on micro-SD memory slot or fileformat FAT32?

When Google Anroid KitKat come out, then 3rd party apps lose their support to write to external memory like micro-SD cards. I red that one reason was the micro-SD cards use FAT32 fileformat and it cannot secure like ext2, 3, 4 etc. But I cannot understand why need to secure game or navigation maps on micro-SD card FAT32. Of course it will be best if we can use pure Linux ext? fileformat on our micro-SD cards; with stock kernel and maybe stop paying to Microsoft.

I don't understand the hostility here against Samsung. It is not like they failed to pay for a shipment of physical goods from Microsoft. The validity of most software patents in the United States is a joke. It was probably easier for Samsung financially to sign the cross licensing agreement at the time. Now for whatever reason they are questioning it, or simply don't agree with it anymore. The logical choice of course is to suspend payment, and let the courts decide the outcome.

Posted via Android Central App

Samsung is the redheaded step child of the Android world. If they did or didn't do it, they are always wrong around here.

Only hate Microsoft that one time. When I bought my Windows 8 laptop. No updates yet, sucky apps in the store. Seldom use the laptop and only use my desktop Window 7. Then i keep track with Microsoft, curios what are they doing, saw all those angry comments. But coming to 2 years now, they actually build up their platform quick with LOTS of updates and a whole lot of beautiful designs and high quality apps. A lot more apps on Windows Phone.

Posted via Android Central App