Microsoft and Samsung Electronics Co Ltd have settled a contract dispute
over patent royalties, though terms of the settlement are confidential,
Microsoft said in a statement on Monday.
Microsoft sued Samsung last
year in a federal court in New York, accusing Samsung of breaching a
collaboration agreement by initially refusing to make royalty payments
after the U.S. company announced its intention to acquire Nokia's
handset business in September 2013.
The lawsuit claimed Samsung
still owed $6.9 million (roughly Rs. 42 crores) in interest on more than $1 billion (roughly Rs. 6,208 crores) in patent
royalties it delayed paying. Samsung has countered that the Nokia
acquisition violated its 2011 collaboration deal with Microsoft.
In
2011 a technology analyst at Citigroup estimated that Microsoft was
getting $5 per Android handset sold by phone maker HTC under a patent
agreement, and that Microsoft was looking for up to $12.50 per phone
from other handset makers it had yet to come to an agreement with. Microsoft has never confirmed those figures, but neither has it said
publicly that the estimates were out of line.
To apply the $5
price to Samsung, the Korean company could be paying Microsoft about
$1.6 billion (roughly Rs. 9,932 crores) per year, based on Samsung's sales of 318 million
smartphones in 2014, according to IDC shipment numbers.
Samsung
said it had agreed in 2011 to pay Microsoft royalties in exchange for a
patent license covering phones that ran Google Inc's Android operating
system. Samsung also agreed to develop Windows phones and share
confidential business information with Microsoft, according to court
filings.
Once Microsoft acquired Nokia, it became a direct
hardware competitor with Samsung, the filings said, and Samsung refused
to share some sensitive information because of antitrust concerns.
Antitrust regulators in the United States and other countries approved the Nokia acquisition.
The
settlement on Monday also ends Samsung's request for arbitration with
the Hong Kong office of the International Court of Arbitration of the
International Chamber of Commerce.
© Thomson Reuters 2015
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