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Microsoft to Samsung: COUGH UP $6.9m in unpaid interest over Android PATENT SPAT

Nokia buyout breached business deal, claims Sammy

Microsoft is pursuing $6.9m in unpaid interest on smartphone royalty payments of more than $1bn from electronics giant Samsung, a freshly unsealed lawsuit revealed on Friday.

The ugly spat comes after Redmond accused Sammy of violating a so-called arms length business contract between the two companies.

Since then, Microsoft has tied up secretive agreements with dozens of Android device makers.

But the software maker alleged in August that royalty payments from Samsung had dried up in the last year as arrangements between the companies started to turn sour, after MS confirmed plans to buy Nokia's smartphone biz.

As we reported at the time, details of the sueball lobbed at the Korean firm by Microsoft were heavily redacted.

Now, a lawsuit unsealed by a New York federal court yesterday, has added a little meat to the bone.

It revealed that Microsoft was seeking $6.9m from Samsung, because - it has been claimed - the electronics giant submitted a late royalties payment in 2013 that breached the licence deal between the pair.

Redmond said in the 23-page amended complaint filed with the US District Court Southern District of New York:

Microsoft's continued success depends in substantial part on its ability to maintain and protect the proprietary technology it creates through its investment in research and development.

The Satya Nadella-run firm said that the royalties were partly calculated based on the volume of Android-based smartphones and fondleslabs sold by Sammy each year.

It added that, under the agreement, MS had "agreed to provide Samsung with certain specified credits, including a royalty credit for a licence to use certain of Samsung's patents during the same period."

Samsung argued, according to the filing, that Microsoft's Nokia buyout would breach the licence deal in a number of ways. As a result, it refused to make the necessary payments owed to Microsoft on 11 October 2013.

On 27 November last year, the electronics company had softened its stance and coughed up the royalties to Redmond, sans $6.9m in interest, the lawsuit stated.

Microsoft - which is demanding action from the court to enforce "the clear contractual provisions of the licence agreement" - further alleged:

Samsung is attempting to convert a commercial contract dispute governed by US law into a Korean regulatory issue.

The lawsuit filed in the Southern District Court of New York is Microsoft Corp vs Samsung Electronics. Case number: 1:14-cv-06039-jsr.

"We are confident that our case is strong and that we will be successful. At the same time, Microsoft values and respects our long partnership with Samsung, is committed to it, and expects it to continue," said Redmond's deputy counsel David Howard.

Samsung could not immediately be reached at time of publication. ®

Correction: An earlier version of this story wrongly stated that Microsoft had accused Samsung of violating a seven-year Android patents cross-licensing deal inked in 2011. But the dispute relates only to a business collaboration agreement between the two firms.

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