Samsung paid Microsoft $1 billion a year for Android patents

ARS Technica writes unsealed court documents from Microsoft's lawsuit against Samsung reveal that the South Korean electronics giant paid Microsoft $1 billion a year for Android patents. Quite a high figure considering Microsoft didn't contribute a single line of coding to Android. The companies entered this deal in September 2011 when they signed a seven-year cross-licensing agreement for mobile patents. The first payment was made without a fuss but after Microsoft's acquisition of Nokia, Samsung refused further payments claiming that Nokia's devices were not covered by the cross-licensing deal and that Microsoft's decision to purchase Nokia voided the agreement in its entirety.

In September 2011, the two companies entered a seven-year cross-licensing agreement for mobile-related patents. The payments for the first year were made without fuss. In August 2013, Samsung told Microsoft that it had assessed the value of the royalties owed for the second year as over $1 billion. Payment of this fee was due in October, but Microsoft says that no payment was received until late November 2013. Redmond's complaint says that Samsung owes more than $6.9 million in interest fees for the late payment (per the terms of the original licensing agreement).

What changed between August and October? In September 2013, Microsoft announced that it was buying Nokia's Devices division. The software giant asserts that Samsung is both claiming that Nokia's devices are not covered by the cross-licensing deal—and hence violating Samsung's own patents—and that the Nokia purchase voids the licensing agreement in its entirety.