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Samsung Requests Arbitration in Microsoft Lawsuit
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Samsung Requests Arbitration in Microsoft Lawsuit

Summary: In an ongoing case against Microsoft, Samsung has filed for arbitration to be conducted in Hong Kong.

Samsung Electronics Co. Ltd. has initiated arbitration proceedings in its suit against Microsoft over smartphone patent royalties.


The lawsuit, which Microsoft filed in August in New York, claimed that Samsung refused to issue royalty payments to Microsoft after Microsoft revealed it intended to acquire Nokia’s handset operations.

Samsung filed the request with the Hong Kong office of the International Court of Arbitration of the International Chamber of Commerce. No explanation was given in the request as to why Hong Kong was selected as a venue for the proceedings.

The request could muddy the pending litigation in New York. According to Samsung, arbitration was requested under certain terms of a business collaboration agreement “to resolve a dispute concerning the calculation of success credits under that agreement.”

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Spokeswoman for Microsoft Jennifer Crider stated the contract dictated the “appropriate venue to interpret the business collaboration agreement is New York.” She added, “We still believe that to be true.”

Just a few days before the arbitration request, Microsoft filed an amended complaint in the New York case seeking a ruling that Microsoft did not breach a business collaboration agreement with Samsung. It also asked the court to issue an order that would force Samsung to pay $6.9 million in interest on over $1 billion in royalty payments. Microsoft claims that Samsung stalled making the payments as a form of protest against the deal with Nokia.

After Samsung signed an agreement with Microsoft in 2011, it paid royalties to Microsoft in a timely manner during the first fiscal year afterward. However, after the deal with Nokia was revealed in September of last year, Samsung stopped making payments, and claimed that the purchase of Nokia breached Samsung’s licensing agreement with Microsoft. When Samsung finally made payments, it did not pay interest, Microsoft asserts.

Microsoft has won similar arguments regarding royalties in the past. Microsoft claimed that Google’s Android software uses some of Microsoft’s technology. Due to these assertions, many hardware makers, including Samsung, agreed to pay patent royalties on Android mobile phones.

Motorola is still fighting Microsoft’s claims. The two companies have been tangled in litigation since 2010.

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