A patent dispute between Motorola and Microsoft has now escalated with a German court ruling that the Xbox 360 cannot be sold within the country. Also included in the banned list include Windows 7, Internet Explorer and the Windows Media Player.
The dispute between the two companies is over video compression technologies over the H.264 video codec – a widely used standard when recording video. Most likely, your digital camera, or the camera on your phone will use H.264 video compression. The case, originally started in the United States, has now spread across Europe.
And in a twist in the tale, an earlier US judgement could see Motorola unable to enforce the injunction in Germany. “Our business in Germany will continue as usual,” a Microsoft spokesperson said. Microsoft also intends to appeal the ruling. As well, according to MCV, Microsoft moved its European distribution centre from Germany to the Netherlands.
Abuse of Patents?
Motorola, however, is being investigated for potentially abusing its position of holding those patents by the European Commission – which was sparked after both Apple (who is also being sued by Motorola) and Microsoft complained. The main problem that both companies had was that they claim that Motorola wasn’t offering its patents – essential to H.264 video – under FRAND.
FRAND – or Fair, Reasonable and Non-Discriminatory – is where a company who holds patents that are deemed essential to a standard must offer a licensing agreement that is “reasonable” and should not harm innovation. In addition, a company should not offer a price that is different to other companies.
Florian Mueller, an intellectual property lawyer and writer of the brilliant FOSS Patents blog (which analyses patent law and lawsuits), has written extensively on this issue and believes that they do have an obligation under FRAND. Writing today:
Motorola actually has an obligation to make licenses to those patents available to all implementers on fair, reasonable and non-discriminatory (FRAND) terms, but instead of honoring its promise and complying with applicable antitrust laws, it demanded royalties that would amount, in a conservative estimate, to $4 billion annually. Microsoft obviously didn’t accept those terms, and Motorola didn’t even genuinely expect it to: from the beginning it just wanted to win injunctions in order to force Microsoft into a broad cross-license agreement.
Mueller also believes that the injunction will be lifted; but also notes that Motorola is the only Android device maker to be in litigation with Microsoft, and that it could even pose a problem with its buyout with Google. If the European Commission finds Motorola to have breached FRAND, then it could put a stop to Google’s buyout of Motorola – and we really know that Google only bought them for the patents.
Motorola is going towards an aggressive route, and that could potentially be a bad thing.