It is not uncommon for companies to allow other companies to use patented materials, so long as they are paid royalties for their use. Therefore, it may not surprise Georgia residents that Microsoft entered into an agreement with Samsung to allow the company to use some of Microsoft’s patented materials relating to smartphones in 2011. Sometime later, a contract dispute erupted between the parties, and Microsoft has filed a lawsuit against Samsung.
The computer software giant says that Samsung owes it $6.9 million in interest on royalty payments that the other company failed to make on time. Reports indicate that payments were made regularly in the first year of the agreement. The problem arose when Microsoft made a bid to purchase Nokia’s handset business.
Samsung claimed that Microsoft breached the agreement by going forward with the purchase and withheld payment to show its disapproval of the deal. Eventually, Samsung did make the royalty payments it owed Microsoft, but it apparently failed to pay the interest due on the overdue payments. Now, Microsoft is asking the court to order Samsung to pay the interest and to rule that it had not breached its agreement with Samsung.
In order for Microsoft to prevail in this contract dispute, it will be necessary for the court to determine that the company did not breach the agreement. Many Georgia companies that are parties to contracts know that a breach of contract can nullify a contract, releasing the other party from any obligation under the agreement. Therefore, if Samsung is to be ordered to pay the interest Microsoft says it owes, the court will need to determine that the contract is still valid and enforceable.
Source: Reuters, “Microsoft says Samsung owes $6.9 million in unpaid interest“, , Oct. 4, 2014