Microsoft sues Samsung over Android patent fees

Microsoft is suing Samsung in a dispute over Android patent fees.

Microsoft says the South Korean firm failed to pay it on schedule for
the use of its inventions and has begun legal action in New York.

In a blog, the US firm said Samsung had used Microsoft's takeover of
Nokia's handset unit "as an excuse to breach its contract".

Samsung has said: "We will review the complaint in detail and
determine appropriate measures in response."

The case marks the first time that Microsoft has launched legal action
against Samsung.

The two companies have a long-running partnership, due to the Asian
manufacturer's sale of Windows PCs and Windows Phone handsets.

Although Microsoft is best known for its own Windows operating system,
it also claims ownership to hundreds of patents relating to Google's
Android OS.

It has pursued many Android device-makers for related licence fees and
to date has struck deals with more than 25 companies, including HTC,
Acer, ZTE and Nikon.

Samsung agreed to Microsoft's demands in September 2011 and made its
first year's payment the following year.

But a censored copy of court papers filed by Microsoft's lawyer, and
posted online by news site Geekwire, indicate that Samsung blocked a
second payment after learning of the Nokia deal in September 2013.

Although the documents state that Samsung later paid the fee in
November 2013, Microsoft claims it is still owed money to cover the
interest on the sum over the period it was not paid.

In addition the US company is unhappy that Samsung is reserving the
right not to make future payments.

It also complains that Samsung has asked the Korean competition
authorities to intervene to eliminate the need for future fees - a
matter that Microsoft says would be outside the regulators' authority.

Furthermore, the papers suggest Samsung has threatened Microsoft with
its own patent infringement claims relating to the Nokia takeover.

"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,"
wrote David Howard, deputy general counsel for Microsoft, on the
firm's blog.

Samsung declined to discuss any of the specific claims.

Microsoft has never disclosed how much it makes from its Android
patents, but analysts have estimated the figure is between $1bn
(£595m) to $2bn a year.

One company watcher said Microsoft would be keen to avoid a precedent
that other firms might try to make use of to cancel their own
payments.

"The fear would be that this case could develop into a revenue stream
leakage that would be difficult to tap," said Windsor Holden, research
director at Juniper Research.