Microsoft CEO Satya Nadella

Samsung Paid Microsoft $1 Billion For Android Patents Last Year

October 4, 2014 - Written By Jeremiah Nelson

Microsoft may be battling Google and Android on the hardware and OS front, but when it comes to licensing agreements, the Redmond, Washington, based company is more than happy to play nice. According to a lawsuit made public last Friday, Microsoft made $1 billion from Samsung last year. That’s just one partner that has signed licensing agreements with Microsoft. HTC and LG also signed agreements between 2010 and 2012.

The lawsuit that Microsoft filed against Samsung is over interest that Samsung owes on late payments. Samsung signed their Android licensing deal with Microsoft in 2011, just before their Android market share exploded. In the lawsuit, Microsoft alleges that Samsung decided not to make their licensing payments on time. Interest accrued on those late payments and Samsung hasn’t paid the interest that they still owe. Samsung has caught up on their late payments, but there is still $6.9 million in unpaid interest that Microsoft is going after.

“After months of painstaking negotiations by two of the biggest and most sophisticated companies in the world, in 2011 Microsoft and Samsung agreed on the terms of a patent license agreement and a separate business collaboration agreement, the latter of which is unique to our relationship with Samsung…Samsung has suggested that Microsoft has breached the business collaboration agreement.”

Microsoft thinks they can win this case. Their Deputy General Counsel, David Howard, said, “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.” Whether they win or lose this case, Microsoft needs to tread lightly in order to avoid damaging their relationship with Samsung. Windows Phone isn’t making them much money. The agreements they have in place with Samsung are doing that and more.