Oct 19, 2018 | Updated: 04:34 PM EDT

Microsoft vs Samsung for Licensing Fees: Galaxy Maker Owes Royalties for Phones and Tablets Under Android Patent Agreement

Aug 04, 2014 02:32 AM EDT

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Samsung was sued by Microsoft on Friday as the Korean company has allegedly backed out of an agreement that requires the Galaxy-maker to pay licensing fees to Microsoft for the phones running on Android that the company sells.

According to reports in PC World, allegations in the complaint include that Samsung has not honored the agreement since at least September of last year, when it was announced that the tech giant acquired Nokia's services and devices. The same allegations also state that the license agreement has been breached by Samsung last fall when it refused to give the royalty on time during the second fiscal year.

Samsung also allegedly refused to pay the subsequent interest on the late payment as the company threatened to once again breach the License Agreement regarding the payment of royalty obligations. The complaint was filed in New York federal court on Friday.

The two companies have been meeting for months in an attempt to reach an agreement, but resolution to the disagreements over their contracts have never been reached, as stated in a blog post by Microsoft on Friday.

David Howard, corporate vice president and general counsel to Microsoft, said that the company does not take the filing of a legal action lightly, especially against a company with which they have enjoyed a productive partnership that they have had for some time now. Still, he admitted that partners do disagree sometimes.

In 2011, Microsoft and Samsung entered into a patent cross-licensing agreement wherein Samsung would pay royalties to Microsoft for using its technology for the company's smartphones and tablets that run on the Android mobile operating system.

Samsung, however, has allegedly decided to stop following the agreement after Microsoft acquired Nokia. Since that year, smartphones made by Samsung have grown substantially with the Galaxy S4 and S5 enjoying roughly 30 percent of the global market.

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