Microsoft sues manufacturing giant Foxconn for unpaid royalties

A battle between giant is brewing. Microsoft, a recognized industry leader in multiple fields, is suing Foxconn, a leading electronics contract manufacturer, for unpaid royalties on patents owned by Microsoft.

It seems that Foxconn has refused to file annual reports of royalties on patents owned by Microsoft. Now Microsoft has claimed they’ve suffered massive losses due to unfiled royalties, which is income that is unaccounted for. Foxconn’s neglect to file the royalties continues even today.

The agreement was initially signed between the two companies in 2013, where it was agreed that Foxconn would share annual reports with regards to royalties owed to Microsoft. Unfortunately, problems began as early 2014 when they filed an inaccurate royalty report. The issue got worse when Foxconn failed to file any reports from 2015 to 2018.

While it is not clear what patents Foxconn failed to submit royalties for, it is clear that the sum owed could be in the millions, if not more. Microsoft is understandably upset with the lack of cooperation from Foxconn and started legal proceedings for accountability from the manufacturing giant.

Legal papers were filed on March 8th, 2019, and we can expect a rigorous battle between the two to take place.

In a quote given to CNET, a Microsoft spokesperson stated:

“Microsoft takes its own contractual commitments seriously and we expect other companies to do the same. This legal action is simply to exercise the reporting and audit terms of a contract we signed in 2013 with Hon Hai. Our working relationship with Hon Hai is important and we are working to resolve our disagreement.”

Hon Hai is the Taiwanese name for Foxconn Technology Group.

This isn’t Foxconn’s only controversy. Employee suicides have made headlines around the world, raising questions about working conditions. But this has not deterred companies from using the manufacturer, however, as it frequently partners with other industry leaders like Apple and Sony.

The Microsoft lawsuit could potentially go on for a long time – anywhere from a few months, to (more likely) years. It will be interesting to see whether or not Microsoft will get their royalties.