Bad News for Samsung

A U.S. judge has rejected Samsung Electronics Co Ltd’s bid to put Microsoft Corp's lawsuit over smartphone patent royalties on hold while the South Korean company pursues an arbitration proceeding in Hong Kong.

In a brief order, U.S. District Judge Jed Rakoff in New York said the lawsuit would proceed despite the arbitration. Rakoff said he would explain his reasoning in a subsequent opinion.

Microsoft sued Samsung in August, accusing it of breaching a collaboration agreement by initially refusing to make royalty payments after the U.S. company announced its intention to acquire Nokia’s handset business in September 2013.

The lawsuit claimed Samsung still owed $6.9 million in interest on more than $1 billion in patent royalties it delayed paying.

Samsung has countered that the Nokia acquisition in April violated its 2011 deal with Microsoft.

Samsung filed the request for arbitration with the Hong Kong office of the International Court of Arbitration of the International Chamber of Commerce.