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Samsung and Microsoft Contract Disagreement will settle on Court

Microsoft filed suit against Samsung on Friday, claiming the device maker has backed out of an agreement that requires it to pay licensing fees to Microsoft for the Android phones it sells.

It's not clear how a court will settle the disagreement between the two, although Microsoft apparently seeks royalties as well as a renewed commitment by Samsung to produce a Windows Phone. Whether that will be an effective marketing strategy remains to be seen.

In a blog post, Howard struck a neutral tone, citing Microsoft and Samsung's long history of partnering with one another. The statement referred to a 2011 agreement where Samsung and Microsoft agreed to cross-license each other's patent portfolio, with Samsung agreeing to pay Microsoft royalties for devices that used the Android operating system. Samsung also said at the time that it would develop and market Windows Phones--a pledge which Samsung largely abandoned after becoming the world's largest supplier of Android phones.

Samsung has not honored the agreement since at least last September, when Microsoft announced it was acquiring Nokia's devices and services business from Google, Microsoft alleged in the complaint.

Samsung changed?
Since Samsung entered into the agreement, its smartphone sales have quadrupled and it is now the leading worldwide player in the smartphone market. Consider this: when Samsung entered into the agreement in 2011, it shipped 82 million Android smartphones. Just three years later, it shipped 314 million Android smartphones. [Source: IDC, WW Quarterly Mobile Phone Tracker – 2014 Q1, Published: May 2014] Samsung predicted it would be successful, but no one imagined their Android smartphone sales would increase this much.

"Samsung breached the license agreement last fall by refusing to make its Fiscal Year 2 royalty payment on time and then refusing to pay interest on its late payment, and is threatening to breach the License Agreement again with respect to its ongoing royalty payment obligations," says the complaint, which was filed Friday in federal court in New York.

Microsoft has struck several licensing agreements with technology companies, supposedly helping them to launch Android products without fear of litigation from Microsoft.

In September 2013, however, after Microsoft announced it was acquiring the Nokia Devices and Services business, "Samsung began using the acquisition as an excuse to breach its contract," Howard wrote. "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."

Microsoft is asking a court to "settle our disagreement," Howard wrote.

Source: http://blogs.microsoft.com/on-the-issues/2014/08/01/microsofts-samsung-action/

If you remember how  how Samsung pays Apple more than 30 trucks of 5 cents. How will Samsung pay Microsoft  now?..


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