Earlier this month, news broke that Microsoft had sued Samsung for unpaid royalties. The South Korean electronics giant is being sued for $6.9 million in unpaid interest on a $1 billion patent royalty charge. Rather than pay the relatively small amount, Samsung is fighting this one in court. Samsung is now saying Microsoft’s acquisition of Nokia violated the terms of their deal with Microsoft, making them a direct hardware competitor. In the filing, Samsung said “The agreements, now between competitors, invite charges of collusion.”
In their deal with Microsoft, which began in 2011, Samsung agreed to pay Microsoft for patents covering their own Android phones, which typically fell under the Galaxy and/or Note branding. Samsung also agreed to produce Windows Phones for Microsoft, and share confidential business information.
Once Microsoft acquired Nokia, Samsung felt they became a direct competitor. That’s when Samsung stopped sharing business info. Samsung felt continuing to share info would violate US antitrust laws.
They’re probably right.
Microsoft believes their case will triumph, but it’s an interesting wrinkle to an already odd story. The 2011 deal stretches for seven years, and Samsung has already threatened to stop payments to Microsoft altogether. Like their scuffle with Apple, this one with Microsoft may get a lot messier before it gets any better.