Microsoft wants Samsung to pay royalties on Android smartphones, according to a new report.
Having cornered a handful of small manufacturers into paying
royalties on their Android devices, Microsoft is now setting its sights on
substantially bigger game: Samsung.
According to a July
6 Reuters report, Microsoft is demanding $15 for each Samsung-produced
Android smartphone. That information apparently came from unnamed industry
officials speaking to the Seoul-based Maeil Business Newspaper. Considering
that Samsung sells millions of Android-based smartphones every year, a per-unit
fee of that size could result in substantial payments to Microsoft.
Microsoft claims the Android platform infringes on a number
of its patents. In light of that, the company has pursued a stark strategy with
regard to manufacturers of Android devices such as smartphones and tablets: pay
royalties, or face a patent-infringement lawsuit. Some companies have chosen to
embrace the royalty agreement option. In April 2010, HTC announced that it had agreed
to pay Microsoft in exchange for the use of "patented technology" in its
Android-powered smartphones. In the wake of that, rumors circulated that
Microsoft was actively seeking similar arrangements with other unnamed
Over the past 10 days, Microsoft
has entered into a series of patent-licensing agreements with four small
Android device manufacturers, including Wistron Corp.,
Onkyo Corp., Velocity Micro and General
Dynamics Itronix. Under the terms of those agreements, the companies will pay undisclosed
royalties to Microsoft.
That being said, some larger Android manufacturers have been
willing to put up a fight. Motorola retaliated to a Microsoft
patent-infringement suit with an intellectual-property complaint of its own.
And Barnes & Noble, whose Nook e-reader uses Android, filed a counter-suit
against Microsoft after the latter sued it for patent infringement.
The bookseller's counterclaim, filed April 25 with
the U.S. District Court for the Western District of Washington at Seattle,
described Microsoft as repeatedly arguing that its patent portfolio would
"entirely preclude the use of Android Operating System by the Nook," and
mentions that both HTC and Amazon have entered into patent-licensing deals with
"Microsoft is misusing these patents as part of a scheme to
try to eliminate or marginalize the competition to its own Windows Phone 7
mobile device operating system posed by the open source Android operating
system and other open source operating systems," it read at one point.
"Microsoft's conduct directly harms both competition for and consumers of
eReaders, smartphones, tablet computers and other mobile electronic devices,
and renders Microsoft's patents unenforceable."
In the meantime, Microsoft's Windows Phone continues to
scramble for smartphone market-share against the likes of not only Android, but
also Apple's iOS and Research In Motion's BlackBerry franchise.
Nicholas Kolakowski on Twitter
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.