Samsung Paid Microsoft $1 Billion Last Year for Android Royalty, Filing Says -- Update

By Shira Ovide 

In a glimpse of the financial stakes in the smartphone-patent wars, Microsoft Corp. said Friday that Samsung Electronics Ltd. paid the software giant more than $1 billion for an annual fee to use Microsoft technology in Samsung phones.

Samsung sells smartphones and tablets powered by Google Inc.'s Android software. But Microsoft has said some of its patents are included in Android technologies, such as methods for displaying multiple windows in a Web browser. Therefore, Samsung and other smartphone makers pay royalty fees to Microsoft for each Android device they sell.

Neither Samsung nor Microsoft have disclosed previously the size of these royalty payments. The amount of Samsung's payment made last fall was included in a previously redacted legal filing in a monthslong contract dispute between the two companies.

In the legal fight that started this summer, Microsoft complained that Samsung failed to honor a 2011 patent-licensing contract between the two companies. Samsung said Microsoft's purchase of Nokia Corp.'s mobile-phone business in April violated the terms of a business contract between the companies, according to the court filing.

Samsung hasn't responded to Microsoft's complaint. A spokeswoman for the company declined to comment Friday.

Patent disputes have become common in the smartphone age, and they have spilled repeatedly into courts, including high-profile tussles between Samsung and Apple Inc. The Microsoft lawsuit shows intellectual property remains a flash point among technology giants.

Microsoft is asking a judge to enforce the terms of the 2011 contract with Samsung and declare that the Nokia acquisition doesn't invalidate the companies' pre-existing agreement. Microsoft also is seeking $6.9 million in damages because Samsung was late paying the $1 billion royalty payment owed last fall.

Write to Shira Ovide at [e-mail]

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