A federal judge has ruled in favor of Microsoft over Google's Motorola Mobility division in the first of two patent trials regarding the use of Wi-Fi and other technology used in Microsoft's Xbox console and some Windows products.
Motorola had filed suit in U.S. District Court seeking 2.25 percent of the net selling price of Microsoft Windows and Xbox products in exchange for licenses to its H.264 and 802.11 technology, according to the suit. That would have amounted to about $4 billion a year for use of the patents. Microsoft countered that Motorola should get about $1 million a year, according to reports.
On Thursday, U.S. District Judge James Robart ruled that Microsoft should pay Google's Motorola unit about $1.8 million, or several cents per unit as a reasonable and nondiscriminatory rate.
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The suit was originally filed in November 2010 in U.S. District Court, Western District of Washington, to determine what a reasonable and nondiscriminatory rate would be. The judge's ruling allows the second patent trial to proceed, one to determine whether there was a breach of contract between Microsoft and Motorola.
"The judge seems to be on top of it and maybe it's Motorola looking to capitalize on this. They should have something to do with it and should be financially compensated, but not make it too prohibitive where they can't work with others because they charge high dollars. It needs to be a collaborative effort," said Debi Bush, CEO of CMIT Solutions of Denver.
Microsoft had argued that the 802.11 standard and the H.264 standards incorporate patented technology, and in order for a company to practice the standard it is necessary to utilize technology that is covered by one or more patents, according to the 207-page document released Thursday.
The initial ruling is a blow to Motorola and to its parent Google, which purchased Motorola Mobility for $12.5 billion
in August 2011.
Microsoft and Motorola have battled in court for the last several years. In addition to this suit, Microsoft charged in 2010 that Motorola's Android-based smartphones violated some of its own patents.
In a statement, Microsoft said the court's decision is good for consumers because it ensures technology can remain affordable, while Motorola issued a statement that the rates it was seeking were reasonable and consistent with others in the industry.
PUBLISHED APRIL 26, 2013