updated 08:50 pm EDT, Wed August 1, 2012
Binding agreements and market rate licensing viewed as keys
On the official Microsoft Technet blog, Microsoft has detailed what it sees as the path to ending the ongoing patent wars between tech companies. While oriented towards its battle with Motorola and parent company Google, Microsoft believes that "patent peace" can only be found through "good faith engagement that is based on two simple, common sense principles." The company says it already abides by, and encourages other companies to adopt, the tenets in its proposal.
Microsoft points out that any patent licensing or use agreement must be comprehensive, stating that any approach that does not lead to all the pending litigation ending won't last and isn't productive. Using the battle with Motorola as an example, Microsoft notes that Motorola is proposing to license only a small portion of the patents that Microsoft owns that are used in the phone manufacturer's products. Microsoft calls this approach "not a recipe for patent peace, but only for selectively disarming an opponent."
Also referring to Google and Motorola, Microsoft's second guideline for patent peace states that any agreement must be based on market rates. Using the suit asserting Motorola's standards-essential H.264 patents as an example, Microsoft claims that 29 companies (including Google) which own more than 2,400 patents essential to the video playback license have established fair, reasonable, and non-discriminatory (FRAND) licensing terms for the patents. Microsoft also points out that it is are also standards-essential patent holders, and readily license their patents to other Android phone manufacturers.
Apparently emphasizing the second point, Microsoft claims to have always been, and remains open to "a settlement of our patent litigation with Motorola. As we have said before, we are seeking solely the same level of reasonable compensation for our patented intellectual property that numerous other Android distributors – both large and small – have already agreed to recognize in our negotiations with them. And we stand ready to pay reasonable compensation for Motorola’s patented intellectual property as well."
Motorola and Microsoft have been embroiled in a patent dispute involving Microsoft's ActiveSync technology and Motorola's H.264 video playback patent. Microsoft has won bans for ActiveSync patent violation on select Motorola devices in Germany and the United States. Motorola has likewise won a ban on Microsoft's Xbox 360 gaming console, which is currently under review and public discussion at the US International Trade Commission.
Microsoft has refused a settlement offer by Motorola which involved Microsoft paying more than 100 times the industry-standard rate for the H.264 patent. Microsoft may be able to sidestep the large licensing fee, as parent company Google has allegedly offered Microsoft a H.264 patent license in the past, and Motorola would now be bound by the agreement since Google acquired it as a subsidiary. As a result of the offer, Motorola and parent company Google are under investigation by the FTC for FRAND abuse. [via Microsoft TechNet Blogs]