Samsung is seeking a judge to invalidate a contract that required the company to pay Microsoft over $1 billion in 2013.
Last summer, Microsoft filed a lawsuit against Samsung, stating that the Korean company was not in compliance with the set terms of the business arrangement between the two parties. Included in Samsung's supposed noncompliance was its failure to pay the annual fee of $1 billion for Samsung to use technology created by Microsoft in the company's mobile phones.
Samsung, along with a multitude of device manufacturers that produce devices powered up by the Android operating system of Google, is in an agreement to pay Microsoft patent royalties for intellectual properties used in the technology of Android.
However, in a filing made to the court last week, Samsung said that because Microsoft acquired the mobile phone division of Nokia for $9.4 billion last April, Microsoft was in violation of the collaboration agreement with Samsung in 2011.
Now, Samsung is claiming that because Microsoft is now a competitor within the mobile phone hardware business, Samsung is now allowed to end the collaboration agreement and patent royalty agreement.
Samsung added that if it continues to pay Microsoft patent royalties after its acquisition of Nokia, then it would be charged with antitrust violations.
"The agreements were intended to embody a collaboration between a manufacturer and a supplier," however, the acquisition of Nokia "incentivized Microsoft to promote its own smartphones over those manufactured and sold by Samsung," wrote Samsung in the court filing.
"The agreements, now between competitors, invite charges of collusion," added Samsung.
Samsung previously looked upon Microsoft as an ally, with collaborations between the two companies including projects such as touch-screen computers. The two companies were not competitors until Microsoft purchased Nokia's mobile phone business, turning it into a rival and complicating the relationship between the two companies.
The licensing agreement between the two companies lasts for seven years, with Samsung paying an undisclosed amount to Microsoft for each Android-based device that the company sells.
Microsoft strongly believes that it will be successful in defending against Samsung's allegations, maintaining that its acquisition of Nokia is not valid grounds to have the agreements with Samsung invalidated.
In addition to countering Samsung's claims, Microsoft is seeking damages worth $6.9 million because of Samsung's delay in the payment of $1 billion in royalties last year, from the sales of less than 300 million units of mobile phones.
