updated 07:15 pm EDT, Mon May 14, 2012
Judge says patent conduct of Motorola not in good faith
Motorola's patent demands and conduct were condemned by a judge overseeing a preliminary ITC ruling against Microsoft. Administrative Law Judge David Shaw wrote an initial determination, entering public records in a redacted state last week, stating that assurances on reasonable licensing of standards-essential patents "were misleading."
The dispute revolves around the H.264 video codec, used by Microsoft in Windows 7, Internet Explorer 9 and the Xbox 360. Microsoft already pays a capped $6.5 million annually to the MPEG LA pool (a combined 2,339 patents on the codec, contributed to by 29 companies) which would reach $60 million if uncapped. The royalty rate set by Motorola of 2.25 percent was deemed unacceptable as it applied not only to the software but also to any products covered by it, therefore it could be seen as 2.25 percent of the total cost of a new computer and costing Microsoft $4 billion for 50 patents as a conservative estimate.
Judge Shaw noted that there was “no evidence that any company would agree to the offer that Motorola sent to Microsoft.” One comment mentioned that the statements made to standards-setting organizations by Motorola were misleading, shown by statements and conduct towards Microsoft and a redacted listing, most likely Apple. Motorola's response to the terms was that it was a starting point in negotiations which the judge believed would last months or years, yet based on the records provided it wasn't a likely scenario, showing Motorola “was not interested in good faith negotiations and in extending a [F]RAND license.”
The European Commission formally started two antitrust investigations against Motorola earlier in April, one of which relates to the identical trial in Germany which saw Motorola persuading the court to stop Windows 7 and Xbox 360 sales in the country. [via FOSS Patents]