U.S. District Judge Jed Rakoff in New York turned down Samsung's bid to place a hold on Microsoft's lawsuit involving smartphone patent royalties. The decision was made despite the arbitration proceeding pursued by the South Korean company.
In August, Microsoft filed a lawsuit against Samsung and accused it of collaboration agreement breaching when the latter refused to pay royalty fees after the former revealed its intention to acquire the handset business of Nokia in September 2013. The agreement had reportedly included the exchanging of information on topics dealing with technology between the two companies.
According to the lawsuit, Samsung owed Microsoft a total of $6.9 million as interest from the original royalty payment sum of more than $1 billion.
Samsung countered Microsoft's lawsuit claim and said that the U.S. company's acquisition of Nokia in April violated the deal which the two companies had agreed to in 2011.
In the 2011 deal, Microsoft and Samsung signed a definitive agreement that would cross-license both company's patent portfolios. The result is a broader coverage for each company's products. The agreement terms indicated that Microsoft shall receive royalties for the South Korean company's mobile phones and tablets that are running on Android. Furthermore, the two companies have agreed to cooperate in the marketing and development of Windows Phone. If Samsung could sell more Windows Phones, it could help lower its Android royalty payments.
It is common knowledge that the only iteration of Windows Phone handsets enjoying a huge number in production is the Lumia branded device.
The acquisition of Nokia's handset division has made Microsoft a direct hardware competitor with Samsung. As a result, Samsung can no longer share sensitive information brought by the company's concerns on antitrust issues. This notion remained despite the fact that antitrust regulators had approved the acquisition.
The acquisition also meant that Samsung's prospect of paying less in Android fees is now shrouded with uncertainty.
"The agreements, now between competitors, invite charges of collusion," said Samsung in a statement.
Samsung attempted to stall the patent lawsuit case while the company insists that the proceedings be held in Hong Kong.
The case will proceed as planned, which means that it shall continue with the original schedule in New York. Judge Rakoff hasn't disclosed yet why he denied Samsung the possibility to put the case on hold. A Microsoft spokeswoman said the company was "pleased that the court agrees that New York is the appropriate venue for this dispute."
