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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

Nathan Bomey, author of Closer
2 hours ago - Economy & Business

Tesla delays Cybertruck until 2023

Tesla debuts the Cybertruck in Hawthorne, Calif., on Nov. 21, 2019. Photo: Frederic J. Brown/AFP via Getty Images

Tesla is at risk of falling behind on one of the most critical products in the American auto industry: pickups.

Why it matters: Pickups are the most profitable segment in the business and account for the first, second and third best-selling vehicles in the country. Without a serious pickup strategy, Tesla could miss out on a huge source of future income.

Defense taking steps to mitigate civilian harm after botched airstrikes

Secretary of Defense Lloyd Austin speaks during a news conference at the Pentagon in Arlington, Virginia on Sept. 1, 2021. Photo: Andrew Harrer/Bloomberg via Getty Images

Defense Secretary Lloyd Austin issued a directive Thursday to improve the U.S. military's approach to civilian harm mitigation and response, calling it a "strategic and a moral imperative."

Why it matters: The Pentagon has faced criticism for years for amassing civilian casualties in its missions, especially in the Middle East. New York Times investigations have found systemic failures in efforts to prevent civilian deaths, as well as a cover-up of a 2019 airstrike that killed dozens of women and children in Syria.

4 hours ago - World

Mapped: The world's most and least corrupt countries

Expand chart
Data: Transparency International; Map: Jared Whalen/Axios

The most corrupt governments in the world are in South Sudan, Syria and Somalia, according to Transparency International's annual index, while the "cleanest" are in Denmark, Finland and New Zealand.

  • Breaking it down: The U.S. is 27th, China 66th, India 85th, Brazil 96th and Russia 136th. Scroll over the map to see each country's ranking.