Microsoft demands $15 per Android device from Samsung

By on July 6, 2011, 11:00 AM

Microsoft is using its patent arsenal to make some cash out of Android's success and the company has set its sights on a big target. According to a Reuters report, the Redmond giant is demanding that Samsung Electronics pay $15 for each smartphone handset it makes based on Google's Android operating system or face a patent infringement lawsuit.

No details are available concerning exactly what patents Microsoft is leveraging, but the company has already managed to successfully extract royalty fees from several Android device makers. Back in April 2010, the company reached a settlement with HTC over the same matter, and in the last couple of weeks four more companies bowed to the pressure: Onkyo, U.S. defense contractor General Dynamics Itronix, Velocity Micro, and Wistron.

Samsung is reportedly looking to lower the payment to around $10 per handset in exchange for a "deeper alliance" with Microsoft and its Windows platform. If Microsoft manages to pull this off, it could represent a few million dollars in revenue thanks to the popularity of Samsung's Galaxy smartphones and tablets.

At the same time the additional cost and legal complexity may chill the adoption of Android, which Google gives away for free, making other platforms such as Windows Phone 7 more attractive to manufacturers.

Microsoft has also sued Motorola and Barnes & Noble for selling products with Android software. The company's Corporate Vice President and Deputy General Counsel, Horacio Gutierrez, defended the actions in a blog post in March: "Microsoft is not a company that pursues litigation lightly. In fact, this is only our seventh proactive patent infringement suit in our 36-year history. But we simply cannot ignore infringement of this scope and scale."




User Comments: 22

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Kibaruk Kibaruk, TechSpot Paladin, said:

Go microsoft go push windows phone, cool marketting bro.

Archean Archean, TechSpot Paladin, said:

Some strong arm tactics from MS, oh well, they have been at the receiving end for many years so I guess they deserve a little leeway in this (as long as their claims are justified and reasonable).

I think they should ask them to simply build a Galaxy SII WP Edition, and I am sure it will sell in good numbers.

treeski treeski said:

@Archean: If a company has the patents, they will always try to collect royalties. That's kind of the point of patents... to protect a company's time/resources spent in creating whatever the technology is that the patents detail.

Also, if you do a little searching, you'll see that it is heavily rumored that Samsung is in fact designing a WP Mango version of its Galaxy SII.

Archean Archean, TechSpot Paladin, said:

Yes tree, I've posted a link to one such rumor some time ago

Guest said:

I wonder if I'm the only one who thinks that there is something inherently wrong with a company holding patents for a technology/technologies being used by one of your biggest competitors? Especially if you weren't involved in it's development?

So much for competition!

Chazz said:

uh isn't that the point guest? Your competitor shouldn't be developing products that you hold patents to without talking to you first.

Chazz said:

Also, I love samsung's proposal to pay 10 bucks and give WP7 Strong support. I think that would be the better deal for Microsoft, since the OEMs have put out some very stale designs for WP7 thus far.

Guest said:

So why doesn't Microsoft sue Google? Why don't all the companies that are being sued by Microsoft sue Google?

Guest said:

You're missing the point, chazz (I'm not that other guest, by the way, but I understood his point). Software patents are so broad and vague now that people incidentally come up with the same ideas as competitors. It's not a case of companies developing ideas based on a competitor's patents without their consent, what's happening is company A comes up with an idea and develops it into a marketable product then company B hauls up some patent they filed years ago and did nothing with that vaguely describes what company A is now doing and demands financial compensation for infringing their patent, it's despicable.

aj_the_kidd said:

I guess MS really wanted to wait until Samsung released the SGS2 before officially making a demand, smart move by MS, I also liked Samsung's counter to give $10 and develop a "deeper alliance", well played by both parties IMO

Chazz said:

Guest said:

You're missing the point, chazz (I'm not that other guest, by the way, but I understood his point). Software patents are so broad and vague now that people incidentally come up with the same ideas as competitors. It's not a case of companies developing ideas based on a competitor's patents without their consent, what's happening is company A comes up with an idea and develops it into a marketable product then company B hauls up some patent they filed years ago and did nothing with that vaguely describes what company A is now doing and demands financial compensation for infringing their patent, it's despicable.

Except, I'm not missing the point. [link] . Companies come out of the woodwork years after a product has been in market with some random patent and expecting huge payouts for it. There should be a time limit on these things. As for Microsoft's patents, you are very wrong, they have been using them and they are still in use at this moment. You'd be a madman to expect that in this day and age, you wouldn't have to pay licensing fees for mobile phone technology.

I'm not an expert on patents or even mobile phones but, as I see it, Microsoft is justified for requesting their due licensing fees. Microsoft has never been a patent troll of a company, they are generally the ones being sued. Apple is the company that sues everyone and everything.

As for the other post. Microsoft is suing the OEM and not google because google doesn't make any money directly from Android. They give the software away for free, so they can only go after the OEMs as they're the ones making money off of it. Google does not offer any legal protection for the OEMs running their OS. Microsoft on the other hand does, so if company A wanted to sue OEM B for a pantent being used in WP7 software. Microsoft would be the one that goes to court over it, not the OEM.

Guest said:

Microsoft kicking azz. Buying Skype, Yahoo, teaming up with FaceBook, Baidu >> Bing for all english search, making WP7 primary phone OS on Nokia devices and in turn identifying the Nokia brand\image with WP7. HTC is onboard and now Samsung is offering to spread its legs and pay $10 doing so.

I think in a world of booms and busts, Ms is about to take off again. Apple will break a leg soon, Google will hang on.

mailpup mailpup said:

There should be a time limit on these things.
Patents do have time limits.

Chazz said:

mailpup said:

There should be a time limit on these things.
Patents do have time limits.

How long do people have before they're no longer able to file a patent dispute? I read stories of people coming 10-20 years after the fact and suing.

pixelstuff pixelstuff said:

What is different between Android and iOS that OEMs using Android have to pay patent royalties, but Apple does not? Or is Apple paying royalties to Microsoft for the patent in question?

Guest said:

That's probably the other way around, pixelstuff.

mailpup mailpup said:

Chazz, that's a legal question I don't know the answer to but patents themselves can last 10 to 25 years depending on what kind they are. That's about all I know about it.

Guest said:

WTF I do not get this so let me get this straight ... Microsoft is making samsung pay for something they do not own and they are getting away with it??? why doesnt google demand $30 for every windows or xbox product sold it would be ok as microsoft are making others pay them for products they do not own unless I missed something in that post...

joeperris said:

Guest said:

So why doesn't Microsoft sue Google? Why don't all the companies that are being sued by Microsoft sue Google?

Google doesn't make any money out of Android, they offer it free to manufacturers.

Its the mobile phone manufacturers that make money out of Android so Microsoft is after them for their cut ;-)

lmike6453 said:

So what is within the Android system that Microsoft has rights to sue for?

MilwaukeeMike said:

While they're at it MS should sue google for their logo. I really doubt it's just coincidence that the four colors of google's logo happen to be the exact same four colors of Microsoft's logo.

And lmike... they're not saying. We don't know (yet).

JudaZ said:

The google logo is based on Lego colours .

their first server had a case built of lego

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