U.S. Judge OKs Sales of Microsoft Xbox in Germany

SEATTLE (CN) - Microsoft can continue selling the Xbox in Germany, a federal judge ruled, a month after granting the software giant a restraining order in an ongoing patent dispute over licensing for wireless technology.

A Seattle judge converted an earlier restraining order in Microsoft's favor into a preliminary injunction that prevents Microsoft products from being removed from the German marketplace.

Though the Institute of Electrical and Electronics Engineers Standards Association (IEEE-SA) requires companies to make "essential" patents available for licensing, Microsoft claims that Motorola "broke its promises" to license essential wireless technology and video-coding patents.

Instead, Motorola demanded "royalties that are excessive and discriminatory," according to the amended complaint.

Meanwhile, a similar dispute in Germany questioned whether Microsoft illegally uses video-compression software in its Xbox 360 and Windows 7 software, in violation of an agreement with Motorola.

In April, U.S. District Judge James Robart granted Microsoft's motion for a temporary restraining order that would prevent Motorola from acting on any injunctive relief it received from the German court.

Then earlier this month, the court in Mannheim, Germany ruled that Microsoft breached an agreement with Motorola, and ordered Microsoft to remove its Xbox 360s and Windows 7 software from the German market.

Last week, Judge Robart extended the restraining order until the court ruled on Microsoft's motion for a preliminary injunction, which it granted Monday.

In his 25 page order, the judge found that "the timing of the filing of the German action raises concerns of forum shopping and duplicative and vexatious litigation."

The judge noted that Motorola's commitment to the International Telecommunications Union involved around 100 patents, but the German action only referred to two patents.

"Microsoft initiated the action in this court in November 2010 placing directly at issue whether it is entitled to a license for Motorola's standard essential patents, including the European patents," the judge wrote.

"Then, over six months later, Motorola seeks to litigate that precise issue with respect to the European patents in the German action denying this court the opportunity to administer the prior filed action."

The court also agreed with Microsoft that the company would suffer irreparable harm without the injunction, while Motorola would not.

"By issuance of an anti-suit injunction, this court is in no way stating that Motorola will not at some later date receive injunctive relief, but only that it must wait until this court has had the opportunity to adjudicate that issue," Judge Robart wrote.

"In the meantime, the court has required Microsoft to post a $100 million bond to compensate Motorola for its losses in the event that this injunction is reversed or vacated."

The court also found it had a strong interest in continuing the action in the United States, where it originated.

The parties are scheduled to square off at trial on November 19.

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