Microsoft and Samsung, according to statements posted in their respective official blogs, have settled the Android patent royalties dispute.
"Samsung and Microsoft are pleased to announce that they have ended their contract dispute in U.S. court as well as the ICC arbitration," the companies wrote.
However, the terms of the settlement remain confidential.
Microsoft filed a lawsuit against Samsung in a New York federal court in August of last year, as Samsung allegedly breached the collaboration agreement signed between the two companies by refusing to pay royalties after Microsoft acquired the handset business of Nokia back in September 2013.
A massive seven-year patent agreement, composed of a cross-licensing agreement and a business collaboration agreement, was reached between Microsoft and Samsung in 2011. The agreement calls for Samsung to pay Microsoft certain royalties for every smartphone and tablet that it is able to sell that uses technology patented by Microsoft.
The agreement was signed prior to Samsung's ascent to its status as one of the top players in the smartphone industry. The company has been looking for a way to avoid having to pay the considerable amount of royalty to Microsoft, and Samsung decided that the acquisition of Nokia's mobile phone division by Microsoft invalidated the contract between the companies.
Microsoft, of course, believes that the contract remains valid, and is seeking for Samsung to pay the royalties owed to them.
For the first fiscal year that the deal covered, Samsung paid royalties worth $1 billion to Microsoft. Samsung was then late in making the payment for the second year, and then outright refused to make payments for the third year.
In November of last year, U.S. District Judge Jed Rakoff in New York denied the bid of Samsung to hold the lawsuit of Microsoft, which called for interest payments of $6.9 million on top of the original royalty payment total worth over $1 billion.
Samsung was attempting to stall the hearing of the case, as the company is insisting that the proceedings should be held in Hong Kong and not in New York.
Samsung is looking to bounce back in the smartphone market and regain its dominance after suffering through a subpar year in 2014. Samsung's sales figures took a hit as Apple's new iPhone 6 challenged the company's offerings in the high-end spectrum, while low-cost smartphone manufacturers such as Xiaomi took away Samsung's market share among low-end devices.
The company is looking to rejuvenate sales with the upcoming release of the Samsung Galaxy S6, which Samsung will unveil on March 1 before the opening of the Mobile World Congress trade show.
