Even though Microsoft doesn’t own Android and does not create Android devices, the company made an astounding $1 billion in royalties last year by allowing Samsung to use the Android operating system, according to a recently released report.
The Android operating system is free to use. Smartphone makers are only required to pay Google if they want to use other Google services on their devices. However, Microsoft filed a claim in 2011, saying Google had infringed on some of its patents in the making of the Android OS. As a result, smartphone makers have to pay Microsoft to use Android because the patents belong to Microsoft.
The $1 billion Samsung paid to Microsoft was the result of a District court patent case that involved both companies. Microsoft says Samsung has not been paying its royalties on time, resulting in $6.9 million in interest fees.
The sealed filing says, “(U)nder the License Agreement, Samsung agreed to make patent royalty payment to Microsoft for a period of seven fiscal years, in exchange for the right to use patented Microsoft technology in Samsung smartphones and tablets that use the Android operating system.”
Samsung is actively looking to get out of this deal, but no settlements have been made at this time. The company will continue to pay Microsoft until either an agreement is reached or Samsung switches to a new operating system.