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Microsoft Android The Almighty Buck The Courts

Samsung Paid Microsoft $1 Billion Last Year In Android Royalties 93

An anonymous reader writes: According to recently unsealed court filings, Samsung Electronics paid Microsoft more than $1 billion in annual fees to use patented Microsoft technology in Samsung's Android phones. The patent treasures include methods for displaying multiple windows in a Web browser. "Samsung originally signed its patent deal with Microsoft in 2011, ahead of its impressive dominance of Android shipments, but late last year Samsung decided it was tired of paying on time, or paying interest when a late payment was finally made. Microsoft has taken Samsung to court over the issues, and the Korean company insists it wants to walk away from the original deal because of Microsoft’s purchase of Nokia’s phone business. Samsung claims the acquisition invalidates the cross-licensing IP agreement, but Microsoft doesnt agree and wants the company to pay $6.9 million in unpaid interest from last year."
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Samsung Paid Microsoft $1 Billion Last Year In Android Royalties

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  • by jkrise ( 535370 ) on Saturday October 04, 2014 @08:46AM (#48062381) Journal

    What the large monies paid by Samsung indicates is the enormous mindshare and marketshare for Android. Windows on the mobile and tablet space is non-existent. For some years Microsoft might make money out of Android sales using these patent threats, being the litigious thugs they are.

    But in a few years - say three at the max, Android makers will realise that these patents are really worthless, and back away from their agreements.

    In any case a few billions in patent royalty is pocket change for Microsoft, and their bloated manpower will plunge them into the death spiral since Windows is becoming fast irrelevant in the only space it serves - viz, the desktop.

    • by Begemot ( 38841 ) on Saturday October 04, 2014 @09:09AM (#48062481)

      Really?

      All large companies have the same IP strategy and they behave exactly the same simply because they can. MS is no exception. Grow up already.
      Android makers are far from being as slow as you imply. If these patents would be worthless, they wouldn't pay anything in the first place.
      Phones and tablets do not replace desktops and laptops. Chances are you wrote your post on a laptop.
      MS has a much wider product line than you imply. Using Skype perhaps?
      Bloated manpower? Mind to prove this statement?

      • by Anonymous Coward

        Perhaps Samsung should just stop infringing Microsoft IP. Do their own stuff. Not copy. Be good people.

        • You mean the patent to use the technology already baked into the web protocols - that was patented after the web protocols were written? that IP? "On a computer" is a magical phrase. If no one has patented it yet, it's fair game - everything on a computer is novel to the patent office. - I'll be very happy if the courts actually apply July's ruling on patent eligibility like they are supposed to, rather than just ignore it again.
        • I think they do already. There is little real evidence to suggest that microsoft actually invented anything, and samsung is guilty of nothing but competition and the law suit was frivolious.

          Speaking of "be good people", bold words from someone supporting microsoft. Mabey they should do their own stuff, not steal via lawsuits, and be good people.
      • by __aaltlg1547 ( 2541114 ) on Saturday October 04, 2014 @09:28AM (#48062553)

        My company's position (it's not that large, only about a $2.5B company) is that patents are for defensive purposes. They don't seem to really think they could use them to keep the competition from copying one of our products. They're much more concerned that we can't develop products without infringing on somebody's patent and being vulnerable to being sued and they want to have a big collection of patents they could use to negotiate better licensing terms or stave off a suit.

      • by jkrise ( 535370 )

        All large companies have the same IP strategy and they behave exactly the same simply because they can.

        Sorry. Google, Motorola, Samsung, etc. have used patents purely in defensive mode. Apple, Microsoft, Oracle, Erricsson etc. are the litigious bastards.

        If these patents would be worthless, they wouldn't pay anything in the first place.

        When these patenting agreements were drawn up, Android had a much smaller marketshare. So rather than getting caught up in litgation, some large Android makers chose to pay.

        • And desktops and laptops last more than 8 to 12 years,

          NOT in a corp environment, they don't! 2 or 3 yrs, tops. corps do a 'refresh' and buy new gear (cheaper than supporting older stuff).

          and every company I've been at in the bay area, for the last 10 yrs at least, has mandated windows (sometimes giving mac a choice) but they NEVER run linux on the desktop. juniper ran freebsd on the desktop for its engineers (2000 timeframe) but that's the exception, not the rule.

          corps keep paying the MS tax. happily,

          • by jkrise ( 535370 )

            In my company, we have 3 colleges, a hospital and software teams that have been using the same PCs for over 6 years now. About 800 of them.

          • NOT in a corp environment, they don't! 2 or 3 yrs, tops. corps do a 'refresh' and buy new gear (cheaper than supporting older stuff).

            Really? I'm glad that you have made it so clear that the Windows 98 machines that I see at work are not really there because the custom apps that would be difficult/impossible to be updated to more modern Windows are not a problem. The other machines that I see with Win XP clearly don't exist either only the very few Win 7 machines exist. Glad you cleared that up.

          • I guess you haven't worked at enough companies to get the full picture then. My employer expressly prohibits Windows on the desktop, providing the choice between either a Mac or an in house supported Linux distribution. And no, I don't work for Apple. Windows is provided where necessary by remote desktop and is heavily restricted in external connectivity - basically it is for access to internal systems where Windows based clients are the only option.
        • by dkf ( 304284 )

          desktops and laptops last more than 8 to 12 years

          Desktops may. Laptops, not really. You run into problems with loss of battery life and gradually increasing general crankiness of the hardware. (The higher-powered a system is when first bought, the longer it lasts; low-ball it, and you're going to have to refresh sooner. And it's possible to replace some components in a desktop far more easily than in a laptop.)

        • by gnasher719 ( 869701 ) on Saturday October 04, 2014 @10:47AM (#48062993)

          Sorry. Google, Motorola, Samsung, etc. have used patents purely in defensive mode. Apple, Microsoft, Oracle, Erricsson etc. are the litigious bastards.

          Excuse me? Google/Motorola trying to extract four billion dollars out of Microsoft for some .mp3 patents? Samsung being told by the EU that they could face a fine up to $17 billion unless they stop trying to use their patents in anti-competitive ways?

          • by steveha ( 103154 )

            Google/Motorola trying to extract four billion dollars out of Microsoft for some .mp3 patents?

            Nope. You are thinking of Alcatel/Lucent. And technically Alcatel/Lucent couldn't ask for a specific amount of money; the award was 1.5 billion dollars but could have been 4.5 billion dollars had the jury decided it was willful infringement.

            Microsoft isn't an angel, but they do pay license fees on patents, and they were paid up on MP3.

            http://en.wikipedia.org/wiki/Alcatel-Lucent_v._Microsoft_Corp. [wikipedia.org]

            Samsung being tol

          • by Xest ( 935314 )

            Have Google ever sued anyone that hasn't sued them first on patent issues? I don't think Google has, which would still make it purely defensive and not an aggressive patent troll like MS is.

            Samsung isn't being told by the EU it faces a fine for using patents offensively and not defensively, it's being fined because it's being told it can't use those specific patents at all in court action because they're too fundamental to be allowed to do anything with them as compared to say, swipe to unlock. As such Sams

      • Not all of them, Google only uses its patents when someone sue it.

        Microsoft not only sues anyone they see as a competitor, but also is part of several patent-collective companies that sue left, right and centre.

        In any case, it seems the company's "IP strategy" is to register as many patents as possible, regardless of validity or ingenuity involved in creating the concepts behind them, and then sue away. Fortunately since the Supreme Court ruled on Alice, these are being taken apart when they get to court.

        H

      • Really?

        MS has a much wider product line than you imply. Using Skype perhaps?

        True, but many of their products don't make money. MS Office is their cash cow and Windows OS is the field upon which the cash cow grazes.

      • perhaps they pay up to keep a windows licence. I notice MS haven't lobbed a sue ball at Google for the self same patents.
      • by Lisias ( 447563 )

        If these patents would be worthless, they wouldn't pay anything in the first place.

        You don't read much, do you?

        Patentes are paid because it's cheaper to pay them that to not. Once your business grow up enough, you see yourself paying to much that it starts to pay up fighting the patents.

        It's just about value, nothing about worth.

    • Only in the consumer world. In the far more lucrative corporate world no-one's going to be writing 500 page documents or huge spreadsheets on an iPad.

      • Or even developing the web pages and apps you use on your iPad.

        Of course, there's Macs and Linux (for now). But business prefers Windows. You avoid the Apple equipment-provider lock-in but get to use pretty much any software you want.

    • There are two ways they might get out from under Microsoft patents:
      1. Have those patents invalidated.
      2. Develop alternatives to the technologies they're now licensing.

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      The desktop that's never going away no matter how many idiots think it is. Until human eyes are comfortable reading tiny text and pecking away at 2" keyboards, tablets are NEVER going to replace desktops. Ever.

      • Until human eyes are comfortable reading tiny text and pecking away at 2" keyboards

        Try using your fingers.

    • by Curunir_wolf ( 588405 ) on Saturday October 04, 2014 @12:26PM (#48063563) Homepage Journal

      But in a few years - say three at the max, Android makers will realise that these patents are really worthless, and back away from their agreements.

      Once you sign an agreement, it doesn't really matter whether the patent is worthless or not - you've agreed to the payments contractually, and that's still legally binding. Samsung is attempting to use some clause in the contract to claim that Microsoft Corporation has done something to invalidate the agreement - that is, transforming to a company with a major smartphone manufacturing subdivision. Maybe that will work, I don't know.

  • by Anonymous Coward

    For all those preaching for a united Linux to face off against the gorilla, it is the diversity which has kept Linux alive.

  • Having not used a Microsoft product since DOS 6 upgrade, this is a reason I can not buy an android phone. However, I have a excellent Jolla phone so not a major problem. http://stevesstats.blogspot.co... [blogspot.co.uk] Microsoft should sue Google if they believe they are being hard dun by, and not blackmail.
    • Having not used a Microsoft product since DOS 6 upgrade, this is a reason I can not buy an android phone. However, I have a excellent Jolla phone so not a major problem. http://stevesstats.blogspot.co... [blogspot.co.uk]

      Microsoft should sue Google if they believe they are being hard dun by, and not blackmail.

      Why? Google's including Microsoft patented technologies in Android isn't a big deal to Microsoft because Google doesn't sell Android. It's the selling the using and the selling that's protected by patent law. Device manufacturers are selling it, so they need to license it. Google's also a seller, but they're small time in that regard, so less important to sue. And if they're paying their license fees or have cross-licensing agreements, all is well for Microsoft.

  • So... (Score:5, Insightful)

    by Greyfox ( 87712 ) on Saturday October 04, 2014 @10:05AM (#48062721) Homepage Journal
    Technically, does that make Microsoft a patent troll?
    • IANAL, but it's my understanding that in the legal world, patent trolls are typically referred to as NPEs—non-practicing entities—because while they may hold a patent, they never do anything with it other than sue people. I haven't looked at the patents in question here, and I certainly can't speak to their validity (let's assume for the sake of argument that they're valid), but as much as I may dislike the company in general, I have to admit that Microsoft does make a lot of stuff and has done

  • by Anonymous Coward on Saturday October 04, 2014 @10:11AM (#48062751)

    The "patents" have been revealed in recent times and are not very good quality, esp. in light of the in re Bilsky decision by the Supreme Court. Quite simply put, they're paying danegeld to Microsoft in exchange for avoiding a costly litigation- the thing is...now they're in one anyhow. So they should man up and butt heads with Microsoft and do in this extortion bullshit once and for all.

    • by Xest ( 935314 )

      Agreed but as I understand it it's possible that the agreement stands regardless of the validity of the patents, so if their agreement with Microsoft is such that they're paying for these patents regardless of validity then there's no point them focussing on invalidating the patents, hence why I suspect they've instead decided to try and invalidate their agreement by arguing that Microsoft is now a smartphone manufacturer where it wasn't before- just as Microsoft managed to argue that payments should be mad

    • by jabuzz ( 182671 )

      Is it worth it in the case of the vFAT/FAT32 patents? They must be due for expiry any time now. Windows 95 is nearly 20 years old. On the other hand I would want to try and get any patents on exFAT invalidated because they still have a long time to run.

      Even the MP3 patents are expiring real soon now, if they are not already expired in your jurisdiction.

  • MS losing money? (Score:5, Interesting)

    by fermion ( 181285 ) on Saturday October 04, 2014 @10:32AM (#48062865) Homepage Journal
    I have often suspected that part of the reason that MS continues to make a phone is so it won't be accused of being a patent troll. If it is making phones, then it is not just trying to monetized a portfolio by attacking others who are doing the real work. I suspect the Surface is the same issue, and the the two might actually be breaking even given royalties.

    I also think that this has nothing to do with MS or the royalties to MS. I think it has to do with Apple. Samsung, for some reason, gave MS a sweetheart deal on the thinnest of evidence. Samsung did not go to court, wait for google, but just paid MS a reletively large amount of cash for every handset sold. This tells me that there was so backroom negotiations going on, possible lawfully questionable negotiations. This, probably, is negatively effecting the Apple situation because if they were so eager to give MS money, why are they fighting Apple on claims that are at least as good? Which means that whatever possible underhanded deal Samsung made with MS is no longer paying off.

    • the reason that MS continues to make a phone

      Microsoft makes a phone? I have not seen one in the wild. Maybe they're just pretending to make a phone so they can ship billions of dollars to tax havens off-shore?

      Okay, yes, Microsoft is still in the phone market - but the tax dodge is very real, as is the lack of sales.

  • Our phones would cost half as much if not for them.

  • Only patent holders suing everyone for the right to never produce anything.

  • by Anonymous Coward

    "late last year Samsung decided it was tired of paying on time, or paying interest when a late payment was finally made."

    Microsoft own Nokia now which interfaces with their precious Samsung offering Windows phone. I've seen the same pettiness from their popular mobile messenger application - Kakao Talk. It now doesn't get updated on Windows Mobile.

    Maybe Microsoft should just throw their shit country overboard. It's a country completely run on pirate versions of Windows in academia, government and the home.

    • by Anonymous Coward

      I was a bit harsh there but really it's lame. Samsung should pay their way like we all have to, and so should all Korean companies or anyone who violates licences, copyright and patents en masse. That's all. Pay up...

      It's fair and better for Korea in the long run if they have a good figure on how sustainable their businesses are financially in the even they do somehow have to pay for what they use.

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