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Microsoft Sues Samsung Over Patent Licensing Agreement

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Microsoft Corp., in a heavily redacted complaint filed today in Manhattan federal court, claimed that Samsung Electronics Co. is using Microsoft’s April acquisition of Nokia Oyj’s phone business as an excuse to stop complying with the contract. Photographer: David Paul Morris/Bloomberg

Aug. 1 (Bloomberg) -- Microsoft Corp. sued Samsung Electronics Co., claiming the South Korean smartphone maker breached a 2011 agreement to share patents.

Under the agreement, the two companies cross-licensed patents for each other’s products. Microsoft, the world’s biggest software maker, got royalties from Samsung for phones and tablets that use some of the U.S. company’s patented technology. The two companies said they would work together to develop and market Windows Phone, Microsoft’s mobile software.

The software giant claimed, in a heavily redacted complaint filed today in Manhattan federal court, that Samsung is using Microsoft’s April acquisition of Nokia Oyj’s phone business as an excuse to stop complying with the contract.

Microsoft said Samsung failed to make a royalty payment on time and refused to pay interest on the late payment. The Redmond, Washington-based company claimed Samsung is threatening to breach the license agreement again because of the Nokia acquisition.

“We don’t take lightly filing a legal action, especially against a company with which we’ve enjoyed a long and productive partnership,” David Howard, Microsoft’s deputy general counsel, said today in a company blog. “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.”

Nokia Business

Microsoft is seeking undisclosed damages and a declaration by the court that its addition of the Nokia phone business doesn’t affect the 2011 agreement with Samsung, which is also locked in a patent battle with iPhone maker Apple Inc.

“We will review the complaint in detail and determine appropriate measures in response,” Adam Yates, a spokesman for Suwon, South Korea-based Samsung, said in an e-mailed statement.

The case is Microsoft Corp. v. Samsung Electronics Co., 14-cv-06039, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Andrew Dunn, Peter Blumberg

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