Google Can’t Block Sales of Microsoft Products, U.S. Judge Rules

Google Inc. (GOOG), which bought Motorola Mobility to gain leverage in the global legal battle over smartphone and tablet computer inventions, can’t use some of its patents to block sales of Microsoft Corp. products, a federal judge ruled.

U.S. District Judge James Robart in Seattle said in a Nov. 30 opinion that, because Motorola Mobility pledged to license some patents on fair and reasonable terms, it can’t seek a court order to halt sales of products that use those inventions. The ruling applies to a group of Motorola Mobility patents that are deemed essential to industry standards for video decoding and Wi-Fi technologies.

“At all times during this litigation, the issue was not if, but when and under what terms, a license agreement would be established between Microsoft and Motorola,” Robart wrote in the opinion. He ruled that Motorola Mobility won’t be harmed if it can’t block the sale of products that comport with industrywide specifications.

Niki Fenwick, a spokeswoman for Google, said the company had no comment on the ruling. David Cuddy, a spokesman for Microsoft, also declined to comment.

Mountain View, California-based Google spent $12.5 billion to buy Motorola Mobility and cited its history of innovations and patents on mobile phones as a key reason behind the purchase. Google has cited Motorola Mobility’s patents to fight back against patent-infringement claims by Microsoft and Apple Inc. (AAPL) over devices running on Google’s Android operating system.

Licensing Terms

Robart’s ruling came in a breach-of-contract case brought by Microsoft over Motorola Mobility’s licensing demands for the Xbox video-gaming system and Microsoft Windows. Robart had already ruled that Motorola Mobility had a contractual obligation to license its standard-essential patents on fair terms because it helped establish the standards.

A separate case in which Motorola Mobility is seeking to block imports of the Xbox is scheduled to begin this week at the U.S. International Trade Commission in Washington.

Two of the three patents in the ITC case relate to the standard for video decoding that were the subject of Robart’s decision.

Motorola Mobility had demanded a royalty of 2.25 percent of the retail price of each product, a figure Microsoft called excessive. The Redmond, Washington-based software maker has said that would amount to $4 billion a year in royalties.

Essential Patents

Robart is evaluating testimony to determine a proper range for reasonable royalties on patents that are incorporated into standards designed to let products from different manufacturers work together. His ruling, expected early next year, would form the basis for a jury trial to determine whether Motorola Mobility’s royalty demand violated its contractual commitments.

The judge had previously prevented Motorola Mobility from seeking sales bans of Microsoft products in Germany based on claims of infringement of standard-essential patents. That decision was upheld by a U.S. appeals court in September.

Apple had also accused Google of violating its commitments. That case, in a Wisconsin federal court, was thrown out after Apple said it wouldn’t accept any rate set by the trial judge that exceeded $1 per unit.

The U.S. Federal Trade Commission and the European Union are investigating claims filed by Microsoft and Apple that Motorola Mobility is misusing its patents to thwart competition.

The case is Microsoft Corp. (MSFT) v. Motorola Inc., 10cv1823, U.S. District Court for the Western District of Washington (Seattle).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.