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Microsoft Corporation (NASDAQ:MSFT) Files a Law Suit Against Samsung Electronics

Boston, MA 10/06/2014 (wallstreetpr) – According to reports, Microsoft Corporation (NASDAQ:MSFT) has decided to sue Samsung Electronics for breaching a contract between these two, which was signed in September 2011. As per the information, both the companies signed a definitive agreement for cross-licensing the patent portfolio of both the companies.

Insights of the matter:

The agreement signed by these two companies was termed as ‘confidential patent license agreement.’ As per the terms and conditions of the agreement, Samsung had agreed to make patent royalty payments continuously for seven fiscal years to Microsoft Corporation (NASDAQ:MSFT). In return, it got the rights to use MSFT’s technology in its smartphones and tablets that run on Android Operating System. Apart from this, MSFT also agreed on a term, according to which it had to provide certain credits related to patent licensing products to Samsung on the annual basis.

The issue happened when Samsung denied to payment on time in the previous year and breached the license agreement. On top of that, it also refused to pay interest on late payment. It kept threatening Microsoft Corporation (NASDAQ:MSFT) thereafter saying that it would breach T&C again by not paying royalty payment for the third fiscal year. The company is giving excuses regarding its acquisition transaction of Nokia Corporation recently. MSFT wants to sort out the matter and want declaratory judgment that-

  • Nokia Corporation (ADR) (NYSE:NOK) Acquisition did not lead to a breach of anti-assignment provisions of the license agreement between Microsoft Corporation (NASDAQ:MSFT) and Samsung.
  • License rights of Samsung also covered subsidiaries and other business units of the company.
  • Nokia Corporation (ADR) (NYSE:NOK) Acquisition does not give Samsung the right to terminate the license agreement and it cannot refuse to make the pre-specifies royalty payments which it agreed initially.
  • Any disputes between both the companies will be sorted out under the United States Law in courtroom.

Apart from continuous future payments, Microsoft Corporation (NASDAQ:MSFT) wants Samsung to pay previously due interest payment of slightly more than $6.9 million of over $1 billion amount.

Published by Fiona Gibson

Fiona is a finance graduate and an expert in analyzing market trends.

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