Microsoft, Samsung strike deal to settle Android patent royalty dispute

Microsoft (NASDAQ: MSFT) and Samsung Electronics agreed to settle a dispute over how much money Samsung would pay to Microsoft to license the software giant's patents that Samsung uses in its Android smartphones and tablets. Financial terms of the settlement were not disclosed.

"Samsung and Microsoft are pleased to announce that they have ended their contract dispute in U.S. court as well as the ICC arbitration," the companies said in a brief statement.

Microsoft sued Samsung in August 2014 in federal court in New York, saying that the South Korean smartphone giant owed it $6.9 million in interest on more than $1 billion in patent royalties it delayed paying. Microsoft said it haggled with Samsung for months over the payments.

Samsung shot back that Microsoft's April 2014 purchase of Nokia's (NYSE:NOK) devices and services business breached a 2011 business collaboration agreement between Samsung and Microsoft. Under that deal, Samsung paid $1 billion in patent royalties to Microsoft in 2013, and Samsung argued in court that the Microsoft/Nokia deal invalidated the agreement because Microsoft became a direct competitor with Samsung in the smartphone market. Microsoft said its Nokia purchase doesn't violate the terms of the agreement.

Samsung is one of around two dozen smartphone and tablet makers that pay Microsoft royalty fees for patents on Google's (NASDAQ: GOOG) Android or Chrome OS platforms. The patents cover common technologies such as displaying multiple windows in a Web browser.

Android is now the world's most widely distributed smartphone operating system, and Samsung is the world's largest handset maker. However, Samsung currently puts most of its efforts behind its Android smartphones, and has not put much emphasis on building phones running Microsoft's competing Windows Phone platform.

For more:
- see this The Verge article
- see this Re/code article
- see this ZDNet article
- see this NYT article

Related Articles:
Microsoft sells record 10.5M Lumia phones in Q4, as it works to integrate Nokia
Samsung: Microsoft's Nokia purchase invalidates our business deal
Samsung paid Microsoft $1B last year in patent royalties related to Android
Microsoft sues Samsung for breaching 2011 patent-licensing deal

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