Microsoft v. Motorola|Patent Wrangle Continues

SEATTLE (CN) - Microsoft failed to fully persuade a federal judge that Motorola's patent fees for "essential" wireless technology are "excessive and discriminatory."

Microsoft sued Motorola in November 2010, claiming Motorola "broke its promises" to the International Telecommunications Union and the Institute of Electrical and Electronics Engineers Standards Association to license "essential" wireless technology patents at a reasonable rate.

"Motorola broke its promises to license patents it asserted as related to wireless technologies known as ''WLAN' and to video coding technologies generally known as 'H.264' under reasonable rates, with reasonable terms, and under non-discriminatory conditions," Microsoft said in its complaint.

Microsoft claimed it relied on Motorola's promises in developing its Xbox video game consoles, Windows 7 and Windows Phone 7.

"In willful disregard of the commitments it made to IEEE and the ITU, Motorola has refused to extend to Microsoft a license consistent with Motorola's promises for any of Motorola's identified patents," the complaint states. "Instead, Motorola is demanding royalty payments that are wholly disproportionate to the royalty rate that its patents should command under any reasonable calculus. Motorola has discriminatorily chosen Microsoft's Xbox product line and other multifunction, many-featured products and software, such as Windows 7 and Windows Phone 7 and products incorporating Microsoft software, for the purpose of extracting unreasonable royalties from Microsoft."

Microsoft sought a ruling that Motorola had a binding contract with the IEEE and ITU to license the patents on "reasonable and non-discriminatory terms," and that Motorola had breached its obligations.

In an order issued Monday, U.S. District Judge James Robart agreed with Microsoft that Motorola was contractually obligated to issue those patents on those terms, and that Microsoft is a third-party beneficiary of those obligations.

But Robart found that Microsoft "jumped the gun" by claiming that Motorola's royalty demands were not reasonable and nondiscriminatory.

"Although Microsoft may ultimately prevail on this point, it has little to do with the issue at hand - how the court should interpret the IEEE and ITU policies with respect to initial offers," the judge wrote.

Until the court has more information about whether Motorola was required to offer its initial licenses on the terms Microsoft described, Robart declined to on that claim.

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