updated 07:15 pm EST, Thu January 24, 2013
Filing claims Motorola should be held to Google's license standards
Google has suffered a setback in the next step of its federal case regarding Microsoft's potential abuse of the H.264 video codec. The head of the MPEG-LA licensing group, Lawrence Horn, declared in a court briefing that Google's agreement with the group and monetary restrictions on licensing fees applies to companies it acquired -- meaning Motorola's claim of Microsoft's patent abuse likely won't net the search engine hundreds of millions of dollars per year, as it has requested from Microsoft. Motorola, as a subsidiary of Google, is held to the same licensing standards as originally signed by Google in 2004.
The affidavit filed strongly supports Microsoft's position in regards to Motorola's obligation to license the patents in accordance with the agreement Google signed. It goes into excruciating detail about Horn's dealings with other companies hammering out contractual definitions of "affiliates," of which Google is one. The document also addresses grant-back clauses, which Motorola is bound by in its licensing negotiations with Microsoft.
Horn clearly states in the closing of the affidavit that "I understand that the grant-back provision of the Google License provides Microsoft with the right to license any AVC/H.264 [standards-essential patents] held by Google, Motorola Mobility LLC, or General Instrument Corporation" at standard pool rates, which Motorola and Google oppose.
Microsoft claims that Google agreed to grant a worldwide license as part of the MPEG-LA AVC essential-patent rules, under the standard rate agreement, rather than the exorbitant rates Motorola wishes to charge the console maker. Motorola refused to license to Microsoft while independent, and while independent, Motorola wasn't subject to MPEG-LA's licensing requirements, being neither a licensee or licensor.
At the end of June, Motorola refused Microsoft's FRAND-friendly MPEG-LA rate while, at the same time, offering to pay a fair, reasonable, and non-discriminatory (FRAND) rate for Microsoft's patents that it infringes. Subsequently, both judges and government agencies in the US and abroad have taken a dim view of Motorola's practices.
Motorola's status as a Google subsidiary following the search engine's purchase of the manufacturer makes it subject to licensing agreements previously negotiated by the search company, along with any licensing deals established after the acquisition, Horn said. Google's primary goal in paying $12.5 billion for Motorola was the acquisition of the manufacturer's patent portfolio, to gain leverage over other companies such as Microsoft and Apple which continue to sue Android phone manufacturers over infringement and FRAND-eligible patent abuse in a number of cases.
Google believes that its license has a different scope than the license Microsoft demands for its products, and its license applies "only to Affiliates identified to MPEG-LA by Google in writing." Google's stance is inconsistent with any standards-essential license practice. The search giant so far has failed to provide Judge Robart's court with any testimony from industry experts supporting its position.
01/23/2013 declaration of Lawrence A. Horn, President & CEO of MPEG LA