Microsoft files suit against Foxconn parent Hon Hai for missing patent-licensing payments

Key Points
  • Microsoft has filed a suit against Foxconn parent company Hon Hai.
  • The Taiwanese consumer- electronics manufacturer allegedly failed to comply with a patent-licensing agreement from 2013.
  • Microsoft has also accused the company of not paying royalties on time.
The Visitor's Center at Microsoft Headquarters campus in Redmond, Washington.
Stephen Brashear | Getty Images

Tech giant Microsoft is taking legal action against Foxconn parent Hon Hai, after the Taiwanese consumer-electronics manufacturer allegedly failed to comply with a patent-licensing agreement from 2013.

In a Friday court filing, Microsoft accused Foxconn of failing to provide twice-yearly royalty reports concerning certain unspecified products and has not made royalty payments on time. The suit was filed in the U.S. District Court for the Northern District of California.

Microsoft is suing for royalty repayment with interest, a review of Hon Hai's books and attorney fees.

Foxconn had agreed to be audited by a third party, Deloitte, in 2017, but has not given the company any documents that were requested, the filing noted.

It is currently unclear what products were covered under the agreement, but in 2013 Microsoft said it had a patent agreement with Hon Hai for Android and Chrome OS devices. A copy of the agreement was submitted to the court but remains under seal.

"Microsoft takes its own contractual commitments seriously and we expect other companies to do the same," a Microsoft spokesperson told CNBC. "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."