Microsoft Beats Google in Patent Court
A court has upheld that the amount that Microsoft pays Google to use certain Motorola patents is properly set. The case is part of an ongoing legal episode which involves Microsoft suing Motorola in 2010 for violating a contract. The court eventually agreed with Microsoft.
Microsoft still has the right to use some of the things that Google now owns, and the court has now agreed with Microsoft that the rates it is paying are fairly set. Motorola had once demanded exorbitant rates from Microsoft for the use of certain patents. Microsoft said foul play when Motorola failed to deliver for the Xbox and other uses.
While there is an ongoing debate on how such rulings will ultimately affect the value of the patent system to innovation, Microsoft is likely pleased with the ruling which now makes it such that Google cannot demand any more for the use of Motorola patents. Some see this as being a negative for the patent industry, as Google may now have less interest in paying large sums for patents if it knows that it will not be able to profit freely from them later.
The court documents outline things in clearer terms:
When we connect to WiFi in a coffee shop, plug a hairdryer into an outlet, or place a phone call, we owe thanks to standard-setting organizations (“SSOs”). […] SSOs set technical specifications that ensure that a variety of products from different manufacturers operate compatibly. Without standards, there would be no guarantee that a particular set of headphones, for example, would work with one’s personal music player. […] The development of standards thereby creates an opportunity for companies to engage in anti-competitive behavior. Most notably, once a standard becomes widely adopted, SEP holders obtain substantial leverage over new product developers, who have little choice but to incorporate SEP technologies into their products.
On the subject of why this is being handled still, and why the federal court must take it up:
Motorola nevertheless appealed from the final judgment in this case to the Federal Circuit. In support of Federal Court jurisdiction, Motorola maintained that the district court’s consolidation of Microsoft’s breach of contract case with Motorola’s patent infringement suit–the latter of which would fall within the Federal Circuit’s jurisdiction on appeal–conferred Federal Circuit appellate jurisdiction over both cases.
Patents play an important role in technology companies of the 21st century. Intellectual property can be the difference between a profitable quarter and a catastrophic loss. Microsoft, one of the most profitable technology companies in history, made the majority of its money by selling licenses to use its intellectual property.
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