Microsoft Targeting Samsung for Android Royalties: Report

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 companies.

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 Redmond.

"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.

Follow Nicholas Kolakowski on Twitter