Microsoft, Samsung, Settle $6.9 Million Android Patent Royalty Dispute

Last August, Microsoft (MSFT) broke a three-year truce with mobile device giant Samsung, suing the Korean manufacturer in a New York federal court for allegedly reneging on patent royalty payments it agreed to in a 2011 cross-licensing deal between the two companies.

Microsoft claimed Samsung stopped paying royalties for using the software maker’s intellectual property (IP) in the device manufacturer’s Android smartphones and tablets. Microsoft argued that Samsung refused to pay interest for the payment delay while blaming Microsoft’s purchase of Nokia’s mobile business as a breach of the original contract.

At the time, court documents were sealed and Microsoft didn’t disclose how much money it wanted from Samsung in the case. But in the subsequently unsealed lawsuit it came out that the amount was $6.9 million for unpaid interest on late payment of $1 billion in royalties for 2013.

Well, that’s all history now, as the two legal combatants apparently have settled their contract dispute, according to a brief and detail-challenged statement Microsoft and Samsung issued on February 9.

“Samsung and Microsoft are pleased to announce that they have ended their contract dispute in U.S. court as well as the ICC arbitration. Terms of the agreement are confidential,” wrote Jaewan Chi, Samsung Executive Vice President and Global Legal Affairs & Compliance Team and David Howard, Microsoft Corporate Vice President and Deputy General Counsel, in a blog post.

According to court documents, Samsung made royalty payments in the first year of the companies’ licensing agreement, some of which were offset by Microsoft’s cross-licensing activities. In the second year of the deal, the parties agreed that the Korean manufacturer owed $1 billion in royalties but Samsung refused to pay when Microsoft bought Nokia. Microsoft countered that the Nokia purchase was included by implication in the companies’ original deal.

In October, Howard said Microsoft’s lawsuit arose after the company spent “months trying to resolve our disagreement,” but remained with a “fundamental disagreement as to the meaning of our contract.”