Microsoft's case against Samsung becomes clear, documents contain lots of fun information

Microsoft is not happy with Samsung right now and is taking the company to court over unpaid interest on a royalty payment. Now that the court documents are public, we read through them (so you don't have to) and pulled out some of the more interesting information.

Getting things kicked off, did you know that Microsoft spent $29 billion in R&D costs between July 1, 2010 and June 29th 2013? Neither did we, but we knew they always dumped a lot of money into this department and it looks like it averages out to about $10 billion a year; not a small chunk of change by any means.

As of June 30, 2013, Microsoft has more than 73,000 issued and pending patents and there are more than 1100 licensing agreements in place. Further, there are more than 25 companies who are licensing patents specifically for Android use.

That's a long black bar covering the interest owed.

Samsung claims that when Microsoft bought Nokia, its cross licensing agreement did not apply to the handsets that the company was now producing and that's the reason they held off on the payments; Samsung said that they were owed damages for their patents being used on Nokia devices.  Later in the year, they had a change of heart and paid Microsoft but did not include any interest on the funds that were held by Samsung that were rightfully Microsoft's. And while we do not know the amount that was owed to Microsoft, the black bar over the interest amount is rather long, fair to say it is not chump change. We do know, based on the document, that the value is above $75,000 as that is the minimum that is a threshold for the court that Microsoft filed the complaint.

Microsoft gave the press a causal shout-out too, noting that the speculation that Microsoft might buy Nokia's smartphone division was nothing new when the contract was signed.

While Samsung says that they are owed damages for the ongoing production of Lumia devices with Samsung IP, Microsoft's counterpoint, is that even if that is true (and they don't think it is true) that is not a valid reason to withhold the interest payment. Microsoft is also accusing Samsung of trying to convert a commercial contract dispute governed by U.S law into a Korean regulatory issue to avoid having to pay royalties.

To no surprise, Microsoft is requesting an unspecified amount of damages from Samsung along with the interest that is owed to them. The amount, like much of the document, is blacked out.

The basic argument is this: Samsung made a payment late and Microsoft wants interest on the late payment but Samsung believes that the Lumia devices Microsoft now makes are in violation of the cross licensing agreement.

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52 Comments

Commenting is disabled on this article.

Do you even read articles, or just blindly write hateful and senseless replies?
And Samsung has built its business on countless patents, among many other things. Hell, almost a thousand US patents were granted (granted, not published) to Samsung last month alone.

Avatar Roku said,
Funny to see Samsung make a complaint about patent infringement. They built their entire business on theft.

What Samsung stole?.

Maybe I'm wrong, but given that this is a Civil case and is a matter of public record, why is anything at all redacted from the case files?

Nothing is redacted. Steven Sinofsky was just trying to draw some Metro tiles on the paperwork because he was bored.

Whith the walloping Samsung has been getting vs apple you would think they wouldn't try it with Microsoft who have more patents then apple.

If things are the way they are put in the article then Samsung's move makes no sense.

If you think you are owed some kind of damages then witholding payment of other royalties will do nothing but hurt your own case.

if definitely looks like an open and shut. it might not even reach trial.

ichi said,
If things are the way they are put in the article then Samsung's move makes no sense.

If you think you are owed some kind of damages then witholding payment of other royalties will do nothing but hurt your own case.

Getting things kicked off, did you know that Microsoft spent $29 billion in R&D costs between July 1, 2010 and June 29th 2013?

That's pretty irrelevant when most of the patents it uses to sue to Android with are pre-mobile < 2000.

simplezz said,
That's pretty irrelevant when most of the patents it uses to sue to Android with are pre-mobile < 2000.

Actually if you look over the list that was leaked the majority of them are specifically about mobile, some deal with technologies that didn't even exist before 2000.

Max Norris said,

Actually if you look over the list that was leaked the majority of them are specifically about mobile, some deal with technologies that didn't even exist before 2000.

Take a look yourself:
http://images.mofcom.gov.cn/pe...1404/20140408143130296.docx

Admittedly that's not all of them, but it's the 100 most important focused on. Guess what no 1. is? FAT (Common Name Space for Long and Short Filenames). Surprise, surprise.

Then you've got nonsense like 'System Provided Child Window Controls', 'Context Sensitive Menu System/Menu Behavior', 'Method And System For Configuring A Timer', and 'Loading Status in a Hypermedia Browser Having a Limited Available Display Area'. How any of them were approved for patents is beyond me. And yes, I've looked beyond the summary of all of them.

simplezz said,
Admittedly that's not all of them, but it's the 100 most important focused on. Guess what no 1. is? FAT (Common Name Space for Long and Short Filenames). Surprise, surprise.

Yes, looked at that list, although that's the short version, there's another with over 300 patents listed. #1 on the list doesn't make it #1 of importance, it's the lowest number because it's the oldest ;) And yet always brought up like it's the only one.. some people just focus on that for some reason and completely disregard the rest.

simplezz said,
How any of them were approved for patents is beyond me. And yes, I've looked beyond the summary of all of them.

Sure, some patents are a tad vague, write a letter to your congressman about that one. Again, that's hardly unique to Microsoft.

Max Norris said,

Yes, looked at that list, although that's the short version, there's another with over 300 patents listed. #1 on the list doesn't make it #1 of importance, it's the lowest number because it's the oldest ;) And yet always brought up like it's the only one.. some people just focus on that for some reason and completely disregard the rest.


Sure, some patents are a tad vague, write a letter to your congressman about that one. Again, that's hardly unique to Microsoft.

The people claiming M-dollar only has that one patent to stand on are living a FAT lie.

They clearly owe them a staggering amount of money.
If it costs Samsung just 2% of that figure to try it on in court and have a remote chance of getting away without paying it, they're obviously going to try it on, its just business.

Great article. That clears a lot up.
Does anybody know if Microsoft charges for use of these essential patents with Windows Phone, or is it just Android?
If not it seems a bit weird, and maybe something the lawyers will latch on to, but I guess that's MS' prerogative to give Windows Phone a leg up.
Maybe Samsung should cut a deal on the missing interest and start shipping more Windows Phones.

mildmanneredjanitor said,
Great article. That clears a lot up.
Does anybody know if Microsoft charges for use of these essential patents with Windows Phone, or is it just Android?
If not it seems a bit weird, and maybe something the lawyers will latch on to, but I guess that's MS' prerogative to give Windows Phone a leg up.
Maybe Samsung should cut a deal on the missing interest and start shipping more Windows Phones.

Up until MS made WP licensing $0 the license fee you paid covered the patents used on the platform.

Samsung paid the royalty. That there is a simple admission of guilt. If Samsung or anyone else want to distribute Android without the two hundred odd patents it infringes all they have to do is write their own software. Why don't they?

Either pay the piper or make your own pipes. Stealing other people's software isn't the answer. Write your own. Simple really.

For the record, a piper is a musician. so that saying doesn't make sense.

I do agree though that companies that have legitimate claims to IP have the right to protect it, and calling everyone who litigates over IP theft or breach of contract patent trolls is damaging. It is almost impossible to attain investment funds or backers if you can't protect and enforce your IP rights so this is necessary. We know that msft invests heavily in research and delivers products, so they aren't trolling like large IP firms that just hold patents without using them.

Major_Plonquer said,
Samsung paid the royalty. That there is a simple admission of guilt. If Samsung or anyone else want to distribute Android without the two hundred odd patents it infringes all they have to do is write their own software. Why don't they?

Either pay the piper or make your own pipes. Stealing other people's software isn't the answer. Write your own. Simple really.

They are developing their own OS, but everyone talks about these patents that Android violates, but I never actually see a list. Where is that?

Not to mention, most patents are so broad and vague, it really depends on what jury/judge you get and not REAL validity.

if i could upload a word document here i would. anyway, if you want a list it's an easy bing/google search.
over 300 patents are at issue/claimed.

farmeunit said,

They are developing their own OS, but everyone talks about these patents that Android violates, but I never actually see a list. Where is that?

Not to mention, most patents are so broad and vague, it really depends on what jury/judge you get and not REAL validity.

rocksturdy said,
if i could upload a word document here i would. anyway, if you want a list it's an easy bing/google search.
over 300 patents are at issue/claimed.

Yup more then 200 ridiculous patents which would be invalidated in Germany, Netherlands, France, UK etc etc.

US patents are ridiculous. Everyone wants to become a lawyer these days and there is quite a bit of work for them just because those stupid patents. Starting companies are destroyed in a week by other companies because of those "rounded corner" patents.

Seahorsepip said,

Yup more then 200 ridiculous patents which would be invalidated in Germany, Netherlands, France, UK etc etc.

US patents are ridiculous. Everyone wants to become a lawyer these days and there is quite a bit of work for them just because those stupid patents. Starting companies are destroyed in a week by other companies because of those "rounded corner" patents.

I thought "rounded corners" was argued as a "trade dress" not a patent?

Seahorsepip said,

Yup more then 200 ridiculous patents which would be invalidated in Germany, Netherlands, France, UK etc etc.

US patents are ridiculous. Everyone wants to become a lawyer these days and there is quite a bit of work for them just because those stupid patents. Starting companies are destroyed in a week by other companies because of those "rounded corner" patents.

Here is the thing, you are saying that based on only skimming the patent titles, maybe reading a few summaries. A patent is all about the details. The descriptions almost always sound vague or repetitive, because the patent itself only focuses on one small process or design improvement, and that information is only found in the detailed section that no one ever reads. Everything else about the original design is not part of the patent and may still be used by others.

It is rare that a single patent introduces an revolutionary new concept no one has even remotely considered before. But uninformed critics seem to think those are the only valid patents.

I am not saying there are not dumb patents out there, I would like to see a peer review requirement added to the patent process to help weed junk patents. But it is foolish to state that every patent falls into that category. Or, every patent owned by company X which you are not a fan of, must be invalid.

then if that is the case whre Samsung thinks they are owed. then they should sue over that in court instead of withholding payment on a contract.
a) Samsung should pay what is owed
b) Samsung should file suite over the dispute with the terms of the cross licensed agreement with nokia and Microsoft.....that is if Samsung truly believes that they have a case.

Give MS the interest you obviously owe them, then stop making hardware for Windows products...Seems fair, its not like anyone is buying Windows Phones anyway, especially handsets that are not Nokia.

I don't think that matters, Microsoft is still getting paid. plus they now have windows phone hardware development under their hands with the buy from nokia. therefore if Samsung stopped selling windows phones it won't be of any significant blow to Microsoft.
anyone remembered when it was HTC who had the android market, then it turned over to Samsung? I bet you it will flip again to someone else or back to HTC. when that happens and if Samsung stopped making windows phones, guess where that will put their handset division? same place where Motorola is.

Sonne said,
Give MS the interest you obviously owe them, then stop making hardware for Windows products...Seems fair, its not like anyone is buying Windows Phones anyway, especially handsets that are not Nokia.

doesn't Microsoft has their own in house lawyer?
then how can you say only the lawyers make money. wouldn't Microsoft get paid the interest owed to them? or on the flip side, wouldn't Samsung get to pay less royalties?
you argument that only the lawyers make money is a bit moot and doesn't apply in this case.

dvb2000 said,
the only people making money here are the laywers.

Meh, the lawyers are employees from MS, surely they do this once per month, the only difference is that they do it with smaller biz....

I don't understand what you're trying to say.....doesn't being an in house lawyer means that you get paid whether you go to court or not? what do you mean they do this with smaller biz?
I've seen many articles about Microsoft going against the government....is the government small biz now?

flyster said,
Meh, the lawyers are employees from MS, surely they do this once per month, the only difference is that they do it with smaller biz....

Melfster said,
Nobody is really Android phones either.

How many Android devices have you seen?
How many iOS devices have you seen?
How many Windows Phone devices have you seen?

When you answer, you'll see that each number that you post following the previous one, will be smaller and smaller....

Melfster said,
Nobody is really Android phones either.

Do you read what you have written before posting? LOL. That's some delusion you've got going there.

Sonne said,
Give MS the interest you obviously owe them, then stop making hardware for Windows products...Seems fair, its not like anyone is buying Windows Phones anyway, especially handsets that are not Nokia.

It's not like Samsung is making anything special on the Windows Phone side and hardly anybody buys their Windows Phones hardware. And even after that MS gives special pricing to those manufacturer that makes Windows Phone or they can increase the cost they charge per Android Phone per device. Either way it's a win win for Microsoft.

nickcruz said,

hardly anybody buys their Windows Phones hardware

Hardly anyone buys Windows Phone period, and if a large OEM like Samsung were to pull out it would only further turn people and press off of Windows Phone. Microsoft is fighting an uphill battle in the mobile space they need all of the help they can get.

riahc3 said,

How many Android devices have you seen?
How many iOS devices have you seen?
How many Windows Phone devices have you seen?

When you answer, you'll see that each number that you post following the previous one, will be smaller and smaller....

This all depends where you live. In some countries it's Android - WP - iOS and others it's Android - iOS - WP.

Open Minded said,

Since no edit (come on Neowin) here's the sauce...

http://www.pcworld.com/article...rcent-smartphone-share.html

If the truth that would mean that about 3MILLION Android phones were shipped EVERY DAY over the past three months. No matter how popular I refuse to believe that to be possible. These number are obviously fabricated. At that amount you would HAVE to see people around you constantly having a new phone really.

They must be shipping boxes these numbers in to a giant warehouse somewhere as with the margins on phones no-one can allow to have any serious stock gathering dust anywhere so they must be sold very quickly.

These number basically claim that for every 28 people ON EARTH one will have bought a new Android phone in the past three months. The numbers simply do not add up and no one seems to even care to question them.

Melfster said,
Nobody is really Android phones either.

Of course not... I mean it's not as if Android has 85% of the smartphone market or anything!

Sonne said,

Hardly anyone buys Windows Phone period, and if a large OEM like Samsung were to pull out it would only further turn people and press off of Windows Phone. Microsoft is fighting an uphill battle in the mobile space they need all of the help they can get.

I have a Windows Phone and cam spot them anywhere I go, each Day I'm starting to see more and more people have one in there hands around the streets

Hell a Co-Worker of mine who loved his Samsung phone, ditched it for a L930 after he played around with mine the 1st day I got it

I spent a month in Brazil for the World Cup, 90% of the people I met and saw had an Android phone (usually a Samsung) 10% had an Iphone. I didn't see one person with a windows phone.
When I start to regularly see app adverts with Android, IPhone & Windows Phone then I'll start to be optimistic about the future of Windows Phone.

Melfster said,
Nobody is really Android phones either.

You guys keep making fun of him, but he's 100% correct!

Many people BUY Android phones, but nobody IS an Android phone...

dead.cell said,

You guys keep making fun of him, but he's 100% correct!

Many people BUY Android phones, but nobody IS an Android phone...

Some of us could be cyborgs with built in phones :p

Sonne said,
Give MS the interest you obviously owe them, then stop making hardware for Windows products...Seems fair, its not like anyone is buying Windows Phones anyway, especially handsets that are not Nokia.

According to AdDuplex there's about 60M Windows Phone users. 12 million activations of the Lumia 520 alone. Small compared to a billion, but 60 million and growing is still lot of nobody.

Samsung barely makes any Windows hardware already and I can't say too many people miss their ugly plastic junk and all of their corny gimmick features. There's a reason why so many Android users cry and plead for Nokia to make them a phone, and that reason is not high satisfaction with Samsung.

Wam7 said,
I spent a month in Brazil for the World Cup, 90% of the people I met and saw had an Android phone (usually a Samsung) 10% had an Iphone. I didn't see one person with a windows phone.
When I start to regularly see app adverts with Android, IPhone & Windows Phone then I'll start to be optimistic about the future of Windows Phone.

That's odd, considering windows phone has a higher share of the market than iphone in Brazil.

Sonne said,

Hardly anyone buys Windows Phone period, and if a large OEM like Samsung were to pull out it would only further turn people and press off of Windows Phone. Microsoft is fighting an uphill battle in the mobile space they need all of the help they can get.

If the hills high enough microsoft could wait it out at the bottom until Samsung die at the top of cold.

Avatar Roku said,
According to AdDuplex there's about 60M Windows Phone users. 12 million activations of the Lumia 520 alone. Small compared to a billion, but 60 million and growing is still lot of nobody.

AdDuplex is a site specifically for the promotion of Windows Phone and their data on sold units are estimates only. You can say 60 million all day and it doesn't mean squat without proof.

BTW WP lost market share last quarter and are sitting at around 2.7% global market share. I highly doubt your 60 million claim.

https://bgr.com/2014/07/31/and...indows-phone-vs-blackberry/

Avatar Roku said,

According to AdDuplex there's about 60M Windows Phone users. 12 million activations of the Lumia 520 alone. Small compared to a billion, but 60 million and growing is still lot of nobody.

Samsung barely makes any Windows hardware already and I can't say too many people miss their ugly plastic junk and all of their corny gimmick features. There's a reason why so many Android users cry and plead for Nokia to make them a phone, and that reason is not high satisfaction with Samsung.

As an Android user, I find the design of Nokia's phones to be horrific. I much prefer simplistic and elegant designs like that of the Nexus 5. The Lumia range in their oversized colourful cases just look obnoxious in my opinion.

Javik said,

As an Android user, I find the design of Nokia's phones to be horrific. I much prefer simplistic and elegant designs like that of the Nexus 5. The Lumia range in their oversized colourful cases just look obnoxious in my opinion.

so basically you just like a black phone. everyone makes those.