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Microsoft vs Samsung patent dispute headed for settlement

Samsung and Microsoft have begun discussions in an effort to reach a mutually beneficially end following their recent patent dispute.

The dispute centres around Samsung's refusal to pay interest applied to late royalty payments on 300 Microsoft owned Android payments. Samsung has been forced to renegotiate terms due to their profits on the decline and their smartphone market share being taken by other manufacturers.

Read more: Microsoft set to lose $2bn in annual Android royalties

Samsung have reportedly been paying between £6 and £9 as royalty to Microsoft for each Samsung device produced. This added up to a substantial £1.8 billion owed in royalties last year.

In a blog post David Howard, corporate vice president and deputy general counsel for Microsoft said, "Samsung predicted it would be successful, but no one imagined their Android smartphone sales would increase this much."

Howard suggested that Samsung stopped the payments due to its smartphone sales quadrupling in three years and typically in these contracts royalty payments increase as sales do.

Read more: 5 good reasons why you shouldn't buy the Samsung Galaxy S5

Howard stated that "after Microsoft announced it was acquiring the Nokia Devices and Services business, Samsung began using the acquisition as an excuse to breach its contract," however "Samsung did not ask the court to decide whether the Nokia acquisition invalidated its contract with Microsoft, likely because it knew its position was meritless."

Despite the legal action Microsoft still believes in its partnership with Samsung, Howard said "Microsoft and Samsung have a long history of collaboration. Microsoft values and respects our partnership with Samsung and expects it to continue. We are simply asking the Court to settle our disagreement."

Microsoft needs to stay on good working terms with Samsung. Microsoft failed to secure the Nokia owned patents when they acquired Nokia's handset division and therefore still need Samsung's wireless patents to produce handsets.

Samsung has not issued a statement on the matter.