Microsoft and Samsung Lawsuit

The last few years has seen many smartphone patent wars, and the latest in the series is the lawsuit filed by Microsoft against Samsung. The case was filed in the U.S. District Court in New York on August 1^st, 2014.

In this case, Microsoft alleges that Samsung violated the contract that both companies signed in 2011. The contract that is in question is pertaining to cross licensing of Microsoft's IP by Samsung, under which Samsung agreed to pay a certain amount of money to Microsoft for using its IP. As per the contract, Samsung agreed to pay a certain undisclosed amount for every smartphone or tablet it sells. This contract brought in good revenue for both the companies, especially Samsung, as its sales quadrupled since 2011. Today, Samsung is one of the leaders in the smartphone industry, and Microsoft alleges that its sales were fueled in part by the contract. While it remains to be seen whether Samsung's sales rose because of the contract, it is nevertheless true that Samsung's sales soared between 2011 and 2014.

This partnership between the two companies took a turn during the later part of 2013 when Microsoft acquired Nokia. Since then, Samsung stopped making payments to Microsoft citing that this acquisition violated the terms of their contract. Microsoft, on the other hand, contended that the acquisition has nothing to do with the contract and Samsung was merely using it as an excuse to avoid the payments. When Microsoft brought up the issue with Samsung, the latter made the delayed payments, but refused to pay interest on the late payment. Hence, Microsoft has sued Samsung for these late interest payments.

With this lawsuit, Microsoft is sending a strong message to all its partners that it takes licensing seriously and it may take up the issue of non-payments through legal channels.