California Patent Attorney® Blog

ITC Sides with Microsoft in Patent Claim

March 28, 2013

game-controller.jpgCalifornia - The long, on-going battle between Microsoft Corp. and Motorola Mobility, Inc. (owned by Google) over the Xbox 360 gaming console could be coming to end based on the most recent decision by the International Trade Commission. Last Friday, Administrative Law Judge David P. Shaw announced that Microsoft was not in violation of Motorola's wireless connectivity patent, No. 6,069,896.

Motorola, obviously unhappy with the decision, still has a chance to convince the ITC to alter the decision by submitting a response. However, the decision will stand unless the ITC modifies it by July of this year.

Motorola has been seeking an import ban on the Xbox due to the alleged patent infringement. The Xbox is a video game console released by Microsoft on November 15, 2001. It represents Microsoft's first foray into the gaming console market.

Microsoft believes Motorola's patents fall into the area of licensing rules called "FRAND" or "fair, reasonable and non-discriminatory terms." FRAND forces businesses with patents to license certain technologies if they constitute a general standard in a particular industry. Microsoft did not deny that it used technology patented by Motorola. Instead Microsoft took the position that Motorola wasn't allowing Microsoft to license the technology at the reasonable rates set out by FRAND. Motorola was insisting that Microsoft pay a 2.25 percent royalty on every Xbox 360 sold, at a cost of approximately $4 billion per year.

The original lawsuit was filed with the International Trade Commission in November of 2010. Motorola based its claims against Microsoft on a total of five patents. Initially Judge Shaw invalidated one of the patents. Now all the patents cited in the action except one have been invalidated or dropped from the complaint.

Regarding the determination, Microsoft's corporate vice president and deputy general counsel made the following statement: "We are pleased with the Administrative Law Judge's finding that Microsoft did not violate Motorola's patent and are confident that this determination will be affirmed by the Commission. The ITC has already terminated its investigation on the other four patents originally asserted by Motorola against Microsoft."

The two companies will still face one another in two subsequent Federal lawsuits which have been put on hold pending the ITC's decision in this matter.