Samsung today defended its attempt to back out of a disputed patent deal with Microsoft, citing antitrust concerns over the Redmond company’s purchase of Nokia’s smartphone business.
At issue in the case are agreements that set out patent licensing fees for Samsung’s use of Android, as well as terms for the two companies to work together on making Windows Phone handsets.
“Before Microsoft’s merger with Nokia DSB, these provisions between Microsoft, an input supplier, and Samsung, a downstream seller, comported with United States antitrust laws,” Samsung said in its filing. “After the Nokia DSB Merger, the agreements, now between competitors, invite charges of collusion. No reasonable business would knowingly undertake the risk of contractually obligating itself to coordinate and collaborate with a competitor—particularly, as here, with respect to setting third-party incentives and controlling the ‘out of box’ experience of a competitor’s products.”
Under one provision, if Samsung hit certain sales targets with its Windows Phones, the company would have to pay less in patent licensing fees. That agreement also mandated that the companies share certain information that Samsung now refuses to give Microsoft. Samsung claims that doing so could run afoul of U.S. antitrust law.
Microsoft’s acquisition of Nokia closed earlier this year, with the approval of U.S. regulators, who didn’t have any antitrust concerns at the time, though it’s not clear if they were privy to or aware of the details of Microsoft’s agreement with Samsung.
Unsurprisingly, Microsoft doesn’t think that Samsung’s argument holds water. A spokesperson for the company said in an email to GeekWire that “Microsoft is confident that our case is strong and that we will be successful.”
Microsoft filed the lawsuit earlier this year, claiming that Samsung had breached its contract and owed the company $6.9 million in back interest. Earlier filings revealed that Samsung paid Microsoft $1 billion in licensing fees last year as a result of the agreement, so any modification to the deal between the two companies could have a significant impact on their businesses.
Microsoft says that Android violates its patents, and has struck licensing deals with a series of Android manufacturers.
Samsung’s full filing is embedded below.