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Tech juggernauts Microsoft and Motorola to match up in court over royalty payments

Here we go once again. Motorola and Microsoft have squared off over what can be defined as reasonable royalty payments for essential patents. The battle has gone on for two long, tiring years, but this may be the last one to determine how much is considered reasonable for Motorola's essential patents.
November 13, 2012
If you’re one of those who aren’t sick of the patent wars, then this will be good news for you. Motorola and Microsoft are due in court soon to battle it out once again. Most patent war battles involve a company accusing another of violating their patents without paying for it. This time for Motorola and Microsoft, it’s a little different. Microsoft has already lost that patent battle. Now, they’re trying to decide what constitutes a fair patent payment.

For those who don’t know, here is pretty much how it works. When a company uses a patent from another company, they pay the patent holder royalties. All these lawsuits are stemming from companies claiming that others aren’t paying royalties for their inventions. We’re talking real inventions, not imaginary ones.

Microsoft has taken it a step further by claiming that Motorola is charging an unfair amount for use of their industry standard patents. Industry standard patents are patents that are absolutely required for tech. Things such as wireless connectivity and video playback.

As the Seattle Times reports, courts in Wisconsin were supposed to determine what is fair for patent payments. However, the courts there didn’t do it, so Microsoft is taking Motorola to court to try again. Even though the trial is taking place in Seattle this time, don’t be fooled. The decision for this case is very important and could cost or save companies billions of dollars.

How much is Motorola even asking for these patents?

According to the Seattle Times, Motorola asks for 2.25% of the sales price. So if a product costs $500, Motorola would make $11.25. It may sound trivial. However, when you add in the cost of building materials, other patent payments, distribution, and other costs, it adds up quickly.

The results of this trial could also have big impacts on other cases involving the two tech juggernauts. This includes a potential injunction on Microsoft products in Germany as well as the United States. At this point, it’s hard to determine a side to root for anymore. Is Microsoft correct in thinking Motorola charges too much? Is Motorola going too far with the product injunctions? Let us know your thoughts.