Why the Microsoft-Samsung Patent Dispute Could Be a Big Deal for the Future of Windows Phone

A patent dispute lawsuit Microsoft has just brought against Samsung could have wide-reaching impact on the Windows Phone business.

Microsoft has enjoyed a pretty sweet deal by collecting a royalty, widely believed to be several dollars for every phone that uses Google’s Android operating system. Exactly what patents, and how, is a long and complicated story: suffice it to say that most of the industry has gone along. This has given Microsoft a steady revenue stream from one of its main rivals in the mobile world. In addition, it has helped Microsoft position Windows Phone as the more economical alternative to Android as Microsoft now gives away Windows Phone to licensees and does not collect a royalty fee on these patents from them. Since device makers have to pay Microsoft for Android, it is no longer free. But Samsung has thrown a wrench in the lucrative arrangement by threatening to stop paying the royalty altogether. To be clear, Samsung didn’t deny Microsoft’s patent claims; rather, it seems to be claiming that Microsoft’s purchase of Nokia somehow invalidates the 2011 deal with Microsoft under which it agreed to pay the patent royalty.