The South Korean tech giant Samsung Group has asked the New York federal court to invalidate a Microsoft contract stating that it (the contract) will invite “charges of collusion”.
Samsung is the defendant in the lawsuit that Microsoft has filed against it earlier in 2014 accusing the company of delaying a patent royalty payment of around $7 million. Now, the Korean company is arguing that it no longer is tied by any agreement with Microsoft as the Redmond, WA-based company has acquired phone maker Nokia, which also happens to be one of the main rivals of Samsung.
According to Samsung’s lawyers, if the argument is not invalidated, antitrust regulators will bring “charges of collusion” against the company.
In the lawsuit filed against Samsung, Microsoft said that the South Korean firm violated a 2011 contract that required it (Samsung) to pay royalties to Microsoft for a patent license for Android OS-based phones manufactured by Samsung.
The above mentioned contract also required the two tech giants collaborate on Microsoft’s Windows phones. According to the agreement, patent payments would drop if the Korean firm manages to meet some specific sales goals (as described in the agreement) for the Windows phones.
However, things started to look different when Windows phones didn’t have the popularity it expected to get; it was found that both Microsoft and Samsung had sales that were much below their actual expectations.
Then, in April, Nokia became a part of Microsoft and Samsung almost immediately stopped making patent payments. According to Samsung, they did so as after becoming the owner of Nokia, Microsoft turned into its direct hardware rival.
Microsoft, on the other hand, was not ready to accept this logic and filed a lawsuit to ensure that it receives the pending patent payment of $6.9 million from the Korean company. Additionally, according to the Redmond-based tech firm, Samsung owes it an interest of over $1 billion on patent royalties that it has delayed paying.
Samsung, to offer a legal argument to these claims of Microsoft, has taken assistance from the US antitrust laws. Based on those laws, the Korean firm is saying that as it is now a competitor of Microsoft, having a contract with the company will eventually invite charges of collusion. Here, it must be noted that antitrust regulators of all countries including the United States have approved Nokia’s acquisition by Microsoft.
Microsoft in response to Samsung’s appeal said that it is sticking to its standpoint as it believes that it has a really “strong” case. It’s, however, not yet known when the judge will be ruling on Samsung’s appeal.