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

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 …

  1. Kaltern

    Bored

    Why not make Apple, Samsung and Microsoft pay each other $10Billion. That should sort everything out once and for all.

    1. Bob Vistakin
      Facepalm

      Re: Bored

      But Apple and Samsung have actually contributed to the mobile industry.

      Microsofts only meaningful revenue stream by miles is what they leech by extortion.

      1. Anonymous Coward
        Anonymous Coward

        Re: Bored

        They are the leech of the industry.

        The funny thing is, the more people that move to from Android to WP, the less money MS get.

      2. Anonymous Coward
        Anonymous Coward

        Re: Bored

        "Apple, Samsung and Microsoft pay each other $10Billion"

        Apple and Microsoft already have a patent cross licensing agreement. Samsung simply don't have as strong a patent portfolio as Microsoft - and spend a much lower percentage of revenue on R&D. Hence end up paying Microsoft for a patent cross licensing agreement.

        "Microsofts only meaningful revenue stream by miles is what they leech by extortion."

        You might want to think so, but Microsoft's annual revenue is about 90 Billion Dollars - of which only a small part is from licensing. They also spent over 11 Billion Dollars last year on R&D.

        "The funny thing is, the more people that move to from Android to WP, the less money MS get."

        Again - you might want to think so - but when you allow for the revenue from Bing search adverts, Windows Store, etc. WP customers are actually far more lucrative than Android ones.

        1. Anonymous Coward
          Anonymous Coward

          Re: Bored

          WP customers are actually far more lucrative than Android ones.

          My real life experience begs to differ, salesman.

      3. RyokuMas
        FAIL

        Re: Bored

        "But Apple and Samsung have actually contributed to the mobile industry."

        Windows mobile conveniently overlooked.

  2. Trigonoceps occipitalis

    Look, I'm a lawyer

    and let m tell you that some of my best friends are lawyers - they are some of the most honourable people I know.

    Not patent lawyers of course.

    (Appologies to the great JC.)

  3. thames

    Cross Licensing

    I read Microsoft's court documents which gave their side of the (much redacted) story. It sounds like the bone of contention is the cross-licensing deal that goes both ways. Samsung pays Microsoft for their patents, but also Microsoft pays Samsung for Samsung's patents.

    However, Nokia and Samsung also had a cross-licensing deal. Now that Microsoft owns Nokia, there seems to be a dispute over which deal takes precedence, and who owe whom how much.

    There also seems to be some sort of deal whereby Microsoft offered something to Samsung in order to persuade Samsung to sell Windows phones. Perhaps there was a platform support deal along the lines of the one where Microsoft paid Nokia to sell Windows phones? If so, then that deal may have gone sour as well when the phones failed to sell.

    Microsoft will no doubt have hyped up any royalties they got from Samsung, while simultaneously hiding the royalties that they paid back to Samsung. It would all be part of their FUD program.

    A few years ago, the smart phone market crown was up for grabs, and phone companies such as Samsung would be willing to pay off a patent troll rather than be willing to risk being locked out of the US market for years while the lawsuit crawled slowly through the famously fair and just US court system in some place like Texas. Even if Samsung won on all counts, they would have lost the market irretrievably to someone else such as LG or Huawei.

    Now that Samsung has a pretty strong market position, they may be willing to fight the patents out in court in an attempt to get most of them tossed out. They may also have had time to study Microsoft's patents and come to the conclusion that none of them were valid or applied. Samsung is also pulling out of the PC business, and so has fewer bridges to burn when it comes to dealing with Microsoft.

    This could turn into an interesting battle.

    1. Anonymous Coward
      Anonymous Coward

      Re: Cross Licensing

      Given that the Nokia patents are still with Nokia, then the licensing deals between Nokia and Samsung are still there between the parties.

      1. thames

        Re: Cross Licensing

        "Given that the Nokia patents are still with Nokia, then the licensing deals between Nokia and Samsung are still there between the parties."

        If the patents are with Nokia, but the handset business is with Microsoft, then who inherited the cross licensing deal? If the deal stays with Nokia, then is Microsoft using Samsung's patents outside of the scope which was envisioned in the original agreement? If the deal went to Microsoft, then what is Samsung getting out of it, considering that Microsoft doesn't own Nokia's patents?

        So you have Nokia, who don't make phones anymore have a cross licensing deal to use Samsung's patents in phones, and Microsoft who now makes phones but whose own patent cross-licensing deal with Samsung was negotiated at a time when Microsoft didn't make phones. That sounds like plenty of room for argument right there. No wonder this has ended up in court!

        Samsung may have gone to Microsoft and said "now that you are making phones, you owe us money for all the hardware patents we have which cover things used in those phones". Samsung then may have started deducting those sums from the amounts that they would otherwise have been paying Microsoft, and indeed may have told Microsoft that Samsung were owed money.

        Very often when a big company buys chips, they have their own licensing deals directly with the patent holders. The chip maker then sells the chip without paying the patent license (because then the buyer would be paying twice).

        Most of the big companies in any given field have lots of patents. The incumbents then get together and trade them off between each other, very often with everything cancelling out. However, Microsoft has come into the market with very few, if any, hardware patents, and a collection of software patents that are looking decidedly less valuable under current court views. Samsung may be in a much better bargaining position now than they were when Microsoft was purely software company with a minor side line in game consoles. It's not unusual for the company which is on the defensive to file suit first in order to preempt the court jurisdiction to somewhere they see as being more favourable to themselves.

        You might have an opinion on what you think the contracts *ought* to say, but none of us actually knows the details. It will all be down the fine print and to what the lawyers will argue was the intent of the original parties to the agreement. The above though fits quite well with what we do know of the facts.

    2. Anonymous Coward
      Anonymous Coward

      Re: Cross Licensing

      @thames: Thanks for that analysis. That should have been the article.

    3. Anonymous Coward
      Anonymous Coward

      Re: Cross Licensing

      "However, Nokia and Samsung also had a cross-licensing deal. Now that Microsoft owns Nokia"

      Microsoft do NOT own Nokia.

      1. Anonymous Coward
        Anonymous Coward

        Re: Cross Licensing

        Microsoft do NOT own Nokia.

        No, they bought Nokia's mobile phone division. To many, that is Nokia.

        "what, they don't just make phones??"

  4. Anonymous Coward
    Anonymous Coward

    What gets me is that MS have never revealed what patents. I would just say 'show me first' then we can sort it, but they won't. Law is an ass.

    1. Anonymous Coward
      Anonymous Coward

      "What gets me is that MS have never revealed what patents"

      The list has already been published on the internet. There are over 200 and many of them are clearly essential to a current Android handset. You could perhaps expect that a few might be invalid or not relevant - but from over 200 it would be likely that enough are to make no difference to the end result. Hence why so many multibillion dollar companies are rolling over and paying up without fighting - they are using technology that Microsoft first invented / patented and therefore must pay up - or chose another way.

      1. eulampios

        @the informant AC

        >>The list has already been published on the internet.

        Not by Microsoft though, so why is that, or so knowledgeable AC?

        >>There are over 200 and many of them are clearly essential to a current Android handset

        Which one exactly is so essential and not ridiculous, like desktop internet shortcut (#162 in that list of published by NOT Microsoft, #5877765

        "Method and System for Displaying Internet Shortcut Icons on the Desktop")

        Before any anonymous MS shill bursts into further eloquent explanations on how clever, novel and non-obvious this idea is, think about millions of ideas MS take for granted without paying the authors just for WorldWideWeb, TCP/IP, HyperTex Markup language or javascript language) this ridiculous patent would make even less sense...

        1. Anonymous Coward
          Anonymous Coward

          Re: @the informant AC

          "Not by Microsoft though, so why is that,"

          Presumably because it puts them in a stronger commercial position not to publish such a list. Most other manufacturers engaged in similar fights for patent rights don't make public the details until it hits court either.

          1. eulampios

            Re: @the informant AC

            >>Presumably because it puts them in a stronger commercial position not to publish such a list.

            Presumably this stronger position applies to Microsoft only. No precedents exist out there. As an example, Google are not a jackal attacking works of others, like Windows or Mac OS X. So they don't have to publish their list, since it doesn't exist.

        2. Anonymous Coward
          Anonymous Coward

          Re: @the informant AC

          "Which one exactly is so essential "

          Well 73 of them are considered 'standards essential mobile technology patents'

          List here: http://images.mofcom.gov.cn/pep/201404/20140408143159274.docx

        3. Anonymous Coward
          Anonymous Coward

          Re: @the informant AC

          JavaScript is an abomination. Silverlight was much better but snivellers like you carried on until MS capitulated and gave you what you wanted. Congratulations, you made the world a worse place.

          1. Peter Gathercole Silver badge

            Re: Silverlight

            Silverlight was always intended to be an infrastructure lock-in by Microsoft, designed to lever more OS sales and damage the viability of other operating systems/platforms.

            Microsoft's collaboration with the Mono team on Moonlight was just lip service. Moonlight was always going to be sufficiently far behind Silverlight to prevent it being a realistic proposition.

            So the world dodged a bullet by deciding to go with the possibly inferior but cross-platform javascript instead.

          2. Jagged

            Re: @the informant AC

            "Silverlight was much better"

            - four words I never expected to see in such a configuration! :o

  5. Bladeforce

    Go Samsung!

    Thats all that needs to be said against the FUD from Redmond

  6. wikkity

    Maybe the EU should

    also ask MS what the exact nature of it's licensing deals with Android manufacturers in the same way they are asking Google.

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