Home / Companies / Samsung initiates arbitration against Microsoft after patent royalty lawsuit

New York: Samsung Electronics Co Ltd initiated an arbitration proceeding in Hong Kong against Microsoft Corp on Tuesday, amid ongoing US litigation over smartphone patent royalties.

The arbitration was disclosed in a court filing as part of a lawsuit Microsoft filed in August in New York federal court accusing Samsung of refusing to make royalty payments to Microsoft after the software company announced its intention to acquire Nokia’s handset business.

Samsung said it filed the request for arbitration with the Hong Kong office of the International Court of Arbitration of the International Chamber of Commerce. The filing did not indicate why the arbitration is taking place in Hong Kong.

The arbitration was commenced under the terms of a business collaboration agreement “to resolve a dispute concerning the calculation of success credits under that agreement," Samsung said.

Representatives for Samsung and Microsoft did not immediately respond to requests for comment.

The arbitration came just days after Microsoft filed an amended complaint in its New York lawsuit asking the court to rule that it did not breach a business collaboration agreement with Samsung.

Microsoft in the complaint also sought an order requiring Samsung to pay $6.9 million interest on more than $1 billion in royalty payments which it delayed in protest of the Nokia deal.

Samsung made royalty payments on time to Microsoft during the first fiscal year after they signed their 2011 agreement, the lawsuit said.

But after Microsoft announced the Nokia deal in September 2013, Samsung initially refused to make another payment, arguing the purchase breached its licensing agreement with Microsoft. Samsung eventually paid late without adding interest, Microsoft said.

Microsoft has successfully argued that Google Inc’s Android mobile system uses some of its technology, and as a result most hardware makers, including Samsung, have agreed to pay patent royalties on Android handsets.

Motorola is one of the main holdouts, and that company has been in litigation against Microsoft since 2010.

The lawsuit in US District Court, Southern District of New York is Microsoft Corp vs. Samsung Electronics Co Ltd, 14-6039. Reuters

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