Motorola has demanded billions of dollars in patent royalties from Microsoft, but the courts have sided with Microsoft, saying Motorola is only entitled to $1.8 million.
US District Court Judge James Robart ruled Thursday on a patent case between Microsoft and Motorola. According to the ruling, Microsoft will be forced to pay Google's Motorola Mobility unit $1.8 million per year in royalties. Motorola had originally demanded $4 billion for use of the patents, which pertain to the H.264 video and 802.11 wireless standards. These standards are used in the Xbox and in Windows phones. While Microsoft was willing to pay, it disputed the amount, which stood at about 2.25% of the product price.
Robart's 207 page long ruling details a “reasonable and non-discriminatory” (RAND) royalty rate and a RAND range, since “more than one rate could conceivably be RAND”. The judge ruled that for the H.264 patents, Motorola was entitled to at least 0.555 cents for each end product sold by Mircosoft, and no more than 16.389 cents per unit. For the 802.11 patents, Motorola was entitled to 3.471 cents per unit sold in regard to the Xbox, and 0.8 cents per unit for other Microsoft products which use the patents.
"This decision is good for consumers because it ensures patented technology committed to standards remains affordable for everyone," Microsoft Deputy General Counsel David Howard said in a statement. Motorola declined to comment. The case will likely have important ramifications for the future of patent law, since it will likely serve as a framework for what licensing terms are to be considered reasonable and fair.
The case began three years ago, when Microsoft sued Motorola for charging excessive royalty fees for licensing their patents. At this point, Motorola counter-sued, claiming infringement on 16 of their patents.