September 5, 2013

Microsoft wins another patent case against Motorola

A federal jury in Seattle found that Motorola failed to license at reasonable terms standard essential patents for wireless and video technology which were used by Microsoft in its Xbox game console.

The dispute dates back to 2010 when Microsoft sued Motorola, claiming that Motorola was charging excessive royalties for licensing on the patents. Motorola had demanded Microsoft pay annual royalties of up to $4 billion for using patents in Windows and the Xbox. Microsoft said it was willing to pay royalties but not at the 2.25 percent of the product price that Motorola sought. In that trial, U.S. District Judge James Robart said the appropriate rate was about $1.8 million, slightly above Microsoft's estimate, but well below Motorola's demand for $4 billion a year.

In the latest trial, Microsoft argued that Motorola's initial demand was exorbitant and a clear breach of its agreement to charge reasonable and non-discriminatory terms - commonly referred to as 'RAND' - for technology that is an industry standard. The jury agreed.

The case has been welcomed by many as it could help establish a very much needed framework for what patent holders can reasonably charge others without falling foul of RAND terms.

If you have comments on this blog please contact John North, Head of Corporate and Commercial on 020 7583 2222 or [email protected] or Sonia Mohammed [email protected]

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