Android makers must pay Microsoft, or else—software giant sues Samsung

Samsung was late in making a patent royalty payment to Microsoft over the Android phones it sells, and today that led to the predictable result: a lawsuit.

"Today's legal action is simply to enforce our contract with Samsung," Microsoft wrote in a blog post explaining its actions. "We don't take lightly filing a legal action, especially against a company with which we've enjoyed a long and productive partnership."

The two companies reached a patent deal in 2011, in which Samsung presumably paid Microsoft for the patents it says apply to devices running Google's Android operating system.

According to Microsoft, Samsung used the Microsoft-Nokia merger "as an excuse to breach its contract." The Microsoft post, by VP David Howard, emphasizes how dominant Samsung's phone business has become:

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.

Microsoft has hundreds of patents that it says must be paid for by anyone who makes Android phones. It's kept those patents secret, although recently a Chinese government website revealed what those patents are.

The patent licensing side of Microsoft's business has grown steadily over the years. Recent estimates of its Android licensing business suggest Microsoft is earning somewhere between $1 billion and $2 billion from Android device makers paying royalties. Microsoft said last year—when it was still getting payments from Samsung—that more than 50 percent of Android devices are made by companies with licensing deals in place.

The complaint (PDF) has been posted by Geekwire. Samsung isn't being sued for patent infringement, but rather breach of contract. Microsoft is only seeking royalty payments to which it believes it is already entitled, as well as interest—it isn't seeking damages for patent infringement per se.