In April 2012, Motorola claimed Microsoft was infringing on several of its patents with their Xbox 360. The ITC sided with the claims, issuing a preliminary ruling. In June, Motorola offered a settlement to Microsoft, asking 50 cents for each sold copy of Windows, and a 2.25 percent royalty fee on every Xbox 360 sold.
Microsoft found the settlement unreasonable, the ITC sent back the case to Judge David P. Shaw. In November, a bench trial officially began, further reviewing Motorola’s claims, and assessing the validity of its licensing fees. Now, a judge has ruled that Motorola’s patents are worth significantly less than the total $4 billion in licensing fees.
The patents in question related to 802.11 Wi-Fi, and H.264 video protocols. According to the ruling, it was determined the proper rate for the H.264 video patents was 0.555 cents on each product sold, with a maximum of 16.389 cents. For the 802.11 patents, it was 3.471 cents on every Xbox 360 sold. For any other devices, the fee was 0.8 cents per product sold, with a maximum of 19.5 cents. While Motorola originally wanted $4 billion in licensing fees, the court reduced that number to just $1,797,554.
From Microsoft corporate vice president David Howard:
This decision is good for consumers because it ensures patented technology committed to standards remains affordable for everyone.
Motorola has yet to issue an official statement, but we hope to be hearing something very soon. While the ruling may be disappointing for Motorola, it’s actually good for patent litigation. The era of big settlements, like the Samsung vs. Apple decision(s), is coming to a close… and that’s only going to drive innovation.