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Samsung and Microsoft settle patent dispute

Samsung and Microsoft said Tuesday they have ended their six-month-long lawsuit over Android patent royalties, although they did not disclose the terms of the settlement.

The two companies posted a joint statement on their blogs announcing the compromise.

“Samsung and Microsoft are pleased to announce that they have ended their contract dispute in U.S. court as well as the ICC arbitration,” wrote Jaewan Chi, executive vice president of Samsung Electronics’ global affairs and compliance team and David Howard, corporate vice president and deputy general counsel at Microsoft, in the statement.

It added that the terms of the agreement are confidential.

The dispute between Microsoft and Samsung started in early August, when Microsoft sued Samsung for breaching an agreement to make royalty payments to the American company in a federal court in New York.

But the patent dispute was ignited much earlier, when Microsoft announced its plan to acquire Nokia’s handset business in September 2013.

Samsung, which signed a cross-licensing deal with Nokia, had to start paying patent royalties to the phone maker when it decided to sell its mobile business unit while maintaining the patent rights for 10 years.

Samsung also agreed in 2011 to pay Microsoft royalties in exchange for a patent license covering phones that ran on the Android operating system.

Under the collaboration, Samsung agreed to develop Windows phones and share confidential information with Microsoft.

However, because Microsoft’s acquisition of Nokia made Samsung its direct competitor, the Korean tech giant refused to share its sensitive business information with Microsoft.

But, Microsoft has promised not to raise patent fees on local smartphone manufacturers.

Accordingly, the local antitrust watchdog Fair Trade Commission resumed reviewing approval of the merger between Microsoft and Nokia.

The lawsuit filed by Microsoft against Samsung claimed that Samsung owes Microsoft $6.9 million in interest on more than $1 billion in patent royalties it delayed paying.

Experts say that the settlement bodes well for Samsung, as more than 90 percent of its smartphones currently run on Google’s Android OS.

BY KIM JUNG-YOON [kjy@joongang.co.kr]