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Judge dashes Samsung's hope to freeze Microsoft lawsuit

Samsung had wanted to put a lawsuit on smartphone patent royalties on hold until an arbitration proceeding could be held in Hong Kong.

Samsung and Microsoft are in a bitter battle over patent royalties. Kent German/CNET

Samsung had been angling to postpone a lawsuit with Microsoft until after an arbitration hearing in Hong Kong, but those hopes have been dashed.

US District Judge Jed Rakoff said in a ruling Tuesday that the lawsuit between Samsung and Microsoft will go on, despite the arbitration, Reuters is reporting after seeing the ruling. Rakoff didn't provide a reason for his ruling, but said he would at some point in the future.

The two companies are engaged in a bitter royalty dispute over smartphone patents. Microsoft argues that Samsung delayed paying it $1 billion in patent royalties for the use of Android and owes interest to the tune of $6.9 million.

Samsung argues that it shouldn't be required to pay the royalties. It says that a deal the companies signed in 2011 explicitly states that while Samsung would pay Microsoft in patent royalties, as soon Microsoft acquired Nokia's phone business, it became a direct competitor, violating some terms of the agreement. Samsung also filed for arbitration in Hong Kong's International Court of Arbitration to sidestep the lawsuit and come to an agreement. Microsoft argued that the case should go on in the US.

After Android launched, Microsoft found that some of its features might have relied on patents Microsoft held related to operating system mechanics. Most major Android developers pay Microsoft a royalty to use Android, effectively giving the software giant a recurring revenue stream on devices running Google's operating system.

Samsung also produces devices that run Microsoft's Windows Phone operating system.

Neither Samsung nor Microsoft immediately responded to a request for comment.