Judge hands Microsoft a key ruling
SEATTLE — A federal judge in Seattle, in a case that has potentially wide-reaching ramifications for tech companies worldwide, has issued a ruling favorable to Microsoft Corp. in its ongoing patent battle with Google Inc.'s Motorola Mobility.
U.S. District Court Judge James Robart on Thursday made public his ruling determining how much Motorola may charge Microsoft for using certain patented Motorola technologies in its products.
The royalty rates and ranges set by Robart are far closer to what Microsoft had proposed than what Motorola had asked for.
Motorola had asked initially for 2.25 percent of each Xbox and Windows sale — a rate that Microsoft said would amount to paying Motorola $4 billion annually.
Microsoft had said that $1.2 million annually might be a reasonable amount to pay Motorola.
Robart set royalty rates that, according to Microsoft, would amount to the company paying Motorola about $1.8 million annually.
“This decision is good for consumers because it ensures patented technology committed to standards remains affordable for everyone,” David Howard, Microsoft's deputy general counsel, said in a statement.
A Google spokesman issued a statement saying that: “Motorola has licensed its substantial patent portfolio on reasonable rates consistent with those set by others in the industry.”
The patents in this case involve standard-essential patents — patents for technologies deemed so essential that they have become standard use in the industry.
This case has wider ramifications for the tech industry because it's the first time a federal judge has ruled on what a reasonable royalty rate or range is for such standard-essential patents.
In the case here, the patents involve technologies used in the H.264 standard for video compression and the 802.11 standard for wireless connectivity. Microsoft uses those technologies in producing Windows and Xbox products.
The trial stemmed from Microsoft's contention that Motorola Mobility, now owned by Google, was asking too much for use of some of its industry patents, breaching a commitment it had made to provide its standard-essential patents on fair and reasonable terms.
Motorola said during the trial that the 2.25 percent royalty rate it had asked for had been intended as an opening offer.
Motorola had said it was willing to cap annual Microsoft payments at between $100 million and $125 million for the H.264 patents alone. In addition, Motorola said Microsoft should pay it a royalty rate of 1.15 percent to 1.73 percent of the sale price of each Xbox 360 for Motorola's 802.11 patents.
Microsoft countered that $1.2 million annually might be a reasonable amount to pay Motorola, based on patent-pool benchmarks.
Microsoft had further argued that looking at patent pool rates would be the best way of determining reasonable royalty rates for Motorola's patents at issue.
Robart's ruling this month marks only the end of the first part of the trial.
The second part is scheduled to start Aug. 26, with a trial that will focus on whether Motorola actually did breach its contract to provide those standard-essential patents on fair and reasonable terms, given that Robart has now determined what such fair and reasonable terms are.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Natrona Bottling Co. keeps soda pop operation focused on craft, taste
- Chevron puts $20M into educating, training Appalachian workers
- Amid struggles, top fiscal executive to leave EDMC
- Stocks rally; S&P 500 has best day of 2014
- PPG Industries to buy Westmoreland Supply paint store chain
- High pollution levels found near Ohio gas wells
- Allegheny Technologies reports $700,000 loss in 3Q
- Plastics, tech sectors crucial to cracker plants
- Fannie Mae might take 3% down
- Large-scale batteries are integral in shift to renewable energy
- Open enrollment puts varied impact of health care law back in focus