- Oct 23, 2012
- 12,527
Microsoft is not happy with Samsung right now and is taking the company to court over unpaid interest on a royalty payment. Now that the court documents are public, we read through them (so you don't have too) and pulled out some of the more interesting information.
Getting things kicked off, did you know that Microsoft spent $29 billion in R&D costs between July 1, 2010 and June 29th 2013? Neither did we, but we knew they always dumped a lot of money into this department and it looks like it averages out to about $10 billion a year; not a small chunk of change by any means.
As of June 30, 2013, Microsoft has more than 73,000 issued and pending patents and there are more than 1100 licensing agreements in place. Further, there are more than 25 companies who are licensing patents specifically for Android use.
That's a long black bar covering the interest owed.
Samsung claims that when Microsoft bought Nokia, its cross licensing agreement did not apply to the handsets that the company was now producing and that's the reason they held off on the payments; Samsung said that they were owed damages for their patents being used on Nokia devices. Later in the year, they had a change of heart and paid Microsoft but did not include any interest on the funds that were held by Samsung that were rightfully Microsoft's. And while we do not know the amount that was owed to Microsoft, the black bar over the interest amount is rather long, fair to say it is not chump change. We do know, based on the document, that the value is above $75,000 as that is the minimum that is a threshold for the court that Microsoft filed the complaint.
Microsoft gave the press a causal shout-out too, noting that the speculation that Microsoft might buy Nokia's smartphone division was nothing new when the contract was signed.
While Samsung says that they are owed damages for the ongoing production of Lumia devices with Samsung IP, Microsoft's counterpoint, is that even if that is true (and they don't think it is true) that is not a valid reason to withhold the interest payment. Microsoft is also accusing Samsung of trying to convert a commercial contract dispute governed by U.S law into a Korean regulatory issue to avoid having to pay royalties.
To no surprise, Microsoft is requesting an unspecified amount of damages from Samsung along with the interest that is owed to them. The amount, like much of the document, is blacked out.
The basic argument is this: Samsung made a payment late and Microsoft wants interest on the late payment but Samsung believes that the Lumia devices Microsoft now makes are in violation of the cross licensing agreement.
