Samsung no longer wants to pay Microsoft royalties, blames Nokia deal

Samsung Galaxy Alpha front top

Back in September 2011, Samsung and Microsoft entered a cross-licensing deal for Samsung’s Android phones and tablets. For specific patents that Samsung used in its Android products, it would pay Microsoft a set amount of royalties. Unfortunately for Microsoft, Samsung is now refusing to pay any royalties whatsoever. According to Samsung, it’s because of the deal between Microsoft and Nokia, reports Reuters.

When Samsung agreed to the cross-licensing deal with Microsoft, another deal was made to ensure that the two companies cooperate in the development and marketing of Windows Phone. Naturally, such a deal would involve Samsung divulging some sensitive information to Microsoft. Microsoft acquired Nokia’s Devices Devision earlier this year and will rebrand Nokia Lumia smartphones to the Microsoft Lumia name from now on. As soon as the Microsoft-Nokia deal went through, Microsoft became a smartphone hardware manufacturer and also Samsung’s competitor in the space. See the problem?

Samsung believes that, since Microsoft purchased Nokia, Microsoft is now a direct competitor. Because of this, the South Korean giant says cooperating with Microsoft and divulging sensitive information is no longer a possibility and that the terms of the 2011 agreement have been violated. In addition, Samsung thinks this could create U.S. antitrust issues, since “the agreements, now between competitors, invite charges of collusion.”

Microsoft, on the other hand, believes that the original agreement will stick and that it has a strong case on its hands. The Redmond company is also charging Samsung with $7 million for not paying the $1 billion royalty fee in a timely fashion last year.

In other words, it doesn’t look like Microsoft and Samsung will invite each other over for dinner anytime soon.