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A Foxconn building in Taipei, Taiwan. Photo: SAM YEH/AFP/Getty Images

Microsoft is suing a unit of Taiwanese contract manufacturer Foxconn over unpaid patent royalties on the consumer devices it makes for others.

Why it matters: Microsoft has a patent license with Foxconn that calls for it to make payments for smartphones, tablets and other devices and to provide an annual audit to Microsoft. The software maker says the company has not been doing either in recent years.

Details:

  • Microsoft's suit, filed on Friday in federal court in San Jose, California, seeks to require Foxconn to produce required royalty reports, pay the royalties it owes and open its books to the court.
  • Microsoft has historically gotten significant royalties on Android-based phones and tablets from most key manufacturers.
  • In the suit, Microsoft says Foxconn submitted an inaccurate report for 2014 and issued no report and paid no royalties for 2015–2018.
  • What's not clear is why exactly Foxconn stopped making the payments and whether it was at the behest of Google or the device makers.

What they're saying: Microsoft said in a statement to Axios that it values its relationship with Foxconn, also known as Hon Hai Precision Industrial Co., and is working to resolve the disagreement.

“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.”

A Foxconn representative was not immediately available for comment.

Go deeper

Justice Department drops insider trading inquiry against Sen. Richard Burr

Sen. Richard Burr (R-N.C.) walking through the Senate Subway in the U.S. Capitol in December 2020. Photo: Stefani Reynolds/Getty Images

The Department of Justice told Sen. Richard Burr (R-N.C.) on Tuesday that it will not move forward with insider trading charges against him.

Why it matters: The decision, first reported by the New York Times, effectively ends the DOJ's investigation into the senator's stock sell-off that occurred after multiple lawmakers were briefed about the coronavirus' potential economic toll. Burr subsequently stepped down as chair of the Senate Intelligence Committee.

Netflix tops 200 million global subscribers

Illustration: Rebecca Zisser/Axios

Netflix said that it added another 8.5 million global subscribers last quarter, bringing its total number of paid subscribers globally to more than 200 million.

The big picture: Positive fourth-quarter results show Netflix's resiliency, despite increased competition and pandemic-related production headwinds.

Janet Yellen plays down debt, tax hike concerns in confirmation hearing

Treasury Secretary nominee Janet Yellen at an event in December. Photo: Alex Wong via Getty Images

Janet Yellen, Biden's pick to lead the Treasury Department, pushed back against two key concerns from Republican senators at her confirmation hearing on Tuesday: the country's debt and the incoming administration's plans to eventually raise taxes.

Driving the news: Yellen — who's expected to win confirmation — said spending big now will prevent the U.S. from having to dig out of a deeper hole later. She also said the Biden administration's priority right now is coronavirus relief, not raising taxes.