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Microsoft and Motorola Call Timeout on Rival Patent Infringement Cases


Until a court in Washington can resolve a licensing question, the two tech titans will pause their lawsuits.

MINYANVILLE ORIGINAL Last week, smartphone rivals Microsoft (MSFT) and Motorola Mobility (the latter recently acquired by Google (GOOG)) agreed to pause litigation in several cases. In these cases, each firm is seeking fees and injunctions against the other, pending a court decision expected this November. Fortunately for interested observers seeking a protracted legal drama (but unfortunately for consumers and investors hoping for a bit of certainty), the recent agreement only establishes a temporary and contained ceasefire between the software/hardware giants. Until a court in Washington State resolves a dispute over patent licensing fees, the two firms have agreed to stay litigation in several cases.

The truce covers three separate petitions. The oldest is a mutual patent infringement claim, with each firm accusing the other of violating intellectual property rights in Washington in November 2010. Microsoft alone brought the other two suits, with one in Wisconsin in April 2011, and the most recent issued in Florida last August, though all have been relocated to the Washington court.

This group of cases, of course, is far from the only current legal struggle between Redmond and Schaumberg. Motorola has several claims against the Windows maker that are unaffected by this détente, including an ongoing case accusing Microsoft of violating several patents related to 3G wireless networking. Earlier this year, Motorola won a ban on the sale of Windows 7, Internet Explorer, and the Xbox 360 gaming console in Germany, though the proscription survived less than a week. Microsoft, meanwhile, achieved its own injunction in German court against Android devices for unauthorized use of multi-message texting protocols, and this one seems to have stuck.

Though the two companies have been going after one another with a fervor that would embarrass the Montagues and Capulets, the properties at stake in the Washington cases are not particularly sexy on their own: Piecemeal patents which one side or the other claims are essential to industry-standard video compression and wireless networking methods.

One detail may surprise you, however: Though Microsoft originated three suits, it only alleges in one that Motorola infringed on any properties. In the rest, Microsoft asserts that the Google-owned manufacturer has failed to license certain patents to Microsoft at a reasonable cost. Such an accusation appears counterintuitive under most concepts of ownership - we wouldn't expect Burger King to sue McDonald's for refusing to sell the recipe for Big Mac Sauce. Yet in the technology world, a certain degree of openness must be enforced to ensure the best outcomes for consumers and producers alike. The onus will be on Motorola to demonstrate that its tech patents follow the FRAND doctrine, which demands that all IP protections be "fair, reasonable, and non-discriminatory."

Microsoft and Motorola agree on the fundamental FRAND principle, but so far have not seen eye-to-eye on a fair price for the licenses to the other's IPs. A recent settlement offer from Motorola was met with a swift rejection from its adversary, with Microsoft's counsel describing the proposed fees as "far in excess of market rates." With the prospects for a mutually agreeable settlement seeming dimmer by the day, the two firms have agreed to postpone the final showdown until Washington's Western District court decides whether or not the firms have been guarding their patents too zealously.
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