Samsung should take note that Microsoft doesn’t fool around when patent license payments arrive late. Microsoft asserts that they have hundreds of patents that are required for any manufacturer making Android phones: Samsung included.
Corporate Vice President & Deputy General Counsel for Microsoft, David Howard, spoke toward the lawsuit, stating that: “Today’s legal action is simply to enforce our contract with Samsung. We don’t take lightly filing a legal action, especially against a company with which we’ve enjoyed a long and productive partnership.” He also noted that: “After spending months trying to resolve our disagreement, Samsung has made clear in a series of letters and discussions that we have a fundamental disagreement as to the meaning of our contract.”
With Microsoft earning between $1B and $2B in patent license revenue made from royalties, this business is one of their most profitable. This is especially true when you consider Howard’s comments on the dominance and success of Samsung’s current phone business:
“So what changed? Since Samsung entered into the agreement, its smartphone sales have quadrupled and it is now the leading worldwide player in the smartphone market. Consider this: when Samsung entered into the agreement in 2011, it shipped 82 million Android smartphones. Just three years later, it shipped 314 million Android smartphones. [Source: IDC, WW Quarterly Mobile Phone Tracker – 2014 Q1, Published: May 2014] Samsung predicted it would be successful, but no one imagined their Android smartphone sales would increase this much.”
Of course, this is just Microsoft’s side of the story; things should get more interesting once Samsung weighs in.