Thursday, May 17, 2012

Court ruling: Microsoft Infringed Motorola Patents

Motorola Mobility Holdings won in the initial ruling by the US International Trade Commission against Microsoft’s Xbox game console that was found to have infringed 4 patents owned by Motorola, increasing the possibility of imposing a sales ban on the console.

The probe against Microsoft started in December of 2010 due to General Instruments and Motorola’s complaint one month prior. Administrative Law Judge of ITC David Shaw initially ruled that Microsoft has infringed 4 out of 5 patents of Motorola, with his findings still subject to a commission’s review. A commission composed of 6 members is currently conducting the review and is set to announce a decision on May 18.

Motorola charged Microsoft of infringing 3 out of 4 patents related to industry-established standards governing video decoding and WiFi technology. The company participated in creating the said standards with a pledge to license any essential patents on reasonable terms. Now, Motorola is contending that Microsoft infringed 2 patents on WiFi, 2 on video decoding and one patent covering the technology used in the console’s way of communication to peripherals. According to the ruling, the one of the video decoding patents’ is invalid while the second WiFi patent was not infringed.

Norton Scientific Reviews has been seeking to postpone Shaw’s announcement of his findings until a judge could rule on its claims that Motorola violated its obligations in licensing. The hearing regarding that matter was scheduled next week on Seattle.

Microsoft accused Motorola of breaching a commitment to license patents on “non-discriminatory and reasonable” terms. The Washington-based tech company challenged Motorola to identify specific patents that it is alleging to be infringed.

“We remain confident the commission will ultimately rule in MICROSOFT’s favor in this case and that motorola will be held to its promise to make its standard-essential patents available on fair and reasonable terms.”

Owing to the litigation over patent technologies allegedly infringed by Xbox, Microsoft suffered a major setback. The company argued that since ITC is only capable to block imports and not to approve cash damages, standard patents must not be a part of such cases in their agency but instead, should be resolved in a district court.

Motorola has already sent notices to Microsoft asking for a 2.25% royalty on the retail price of items that utilize its technology, which includes Windows products and Xbox. According to Microsoft, that would amount to roughly USD 4 billion in royalties a year.

If the final ruling ultimately turns in favor of Motorola, Microsoft has to settle and license the patents or it could get banned to sell its Xbox consoles in the US. Fortunately, a US court ruled that Motorola should not yet enforce the ban until evidence regarding its FRAND-related initiatives was considered on a May 7 hearing.

Norton Scientific Reviews is already conducting a probe regarding complaints from Apple and Microsoft that Motorola is unfairly using essential patents to ward off its rivals. Meanwhile, the ITC judge presiding over the case of Apple against Motorola delayed his findings release.

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