updated 08:45 pm EST, Tue November 13, 2012
Opening statements made, trial will run up to Thanksgiving
After months of legal wrangling and buildup, Microsoft and Motorola Mobility are at last facing off in Judge Robart's Seattle-based federal courtroom. As expected, Microsoft attorneys told the court that the company would pay for a license fee for Motorola's H.264 and Wi-Fi patents, but only if it was commensurate with the value the patents added to the products. Motorola persists with its demands for a flat 2.25 percent of the retail price of goods using the patents, which includes Windows 7, the Windows 7 Phone, and the Xbox 360.
Standing in the way of Motorola's demands is the nature of the patents -- the ones being asserted are standards-essential patents, and all deemed essential to interoperability. Standards-essential patents must be negotiated under fair, reasonable, and nondiscriminatory (FRAND) conditions.
Microsoft claims that the Motorola fee is unreasonable, and as such, a violation of its FRAND obligations. Motorola will be arguing that the offer is the same it offers universally, and fair value of the license should be dictated by previous contracts it has successfully negotiated with other licensees.
Motorola is seeking $4 billion a year for patents in its portfolio, whereas Microsoft believes that the value is $1.25 million or less. Microsoft is also claiming that Google agreed to grant a worldwide license as part of the MPEG LA AVC essential patent rules, under the standard rate agreement, which would also greatly reduce the amount owed Motorola if the offer is found to be valid.
Both parties have requested that the courtroom be cleared when financial details were discussed, despite Motorola using the facts as defense. Judge Robart denied the request -- the general public will not be allowed to see documents describing patent negotiations or other financial data. The judge did declare that any testimony will be given in an open court, saying in his ruling yesterday that "if a witness discloses pertinent terms, rates or payments, such information will necessarily be made public."