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Motorola Mobility Faces Patent Retrial After Deadlock

Google Inc. (GOOG)’s Motorola Mobility will face a new trial against patent-licensing firm Intellectual Ventures over mobile-device technology after a jury said it couldn’t agree on a verdict following two days of deliberations.

U.S. District Judge Sue L. Robinson in Wilmington, Delaware, dismissed the panel of five men and five women yesterday after sealing the courtroom from the public. Robinson declared a mistrial and called for a retrial after the jury failed to reach a unanimous decision, Bellevue, Washington-based Intellectual Ventures said in a statement on its website.

The impasse leaves unresolved claims that Motorola Mobility infringed three Intellectual Ventures patents covering mobile-phone technology. Google, whose Android operating system is the most popular platform for smartphones, has also fought claims that it uses technology belonging to Microsoft Corp. (MSFT)

Last month Google announced plans to sell the Motorola phone business to China’s Lenovo Group Ltd. (992), the world’s largest personal-computer maker, for $2.91 billion. Google, based in Mountain View, California, will retain a majority of Motorola Mobility’s patent portfolio, with Lenovo receiving a license to the intellectual property.

Lenovo shares fell 2.4 percent today in Hong Kong trading. Google rose about 1 percent to $1,152.41 at 10:57 a.m. in New York.

Patent Licensing

Intellectual Ventures, co-founded by Nathan Myhrvold, a former chief strategist at software giant Microsoft, has made money from legal settlements, strategic sales of portfolios, retail licensing and subscription-based licensing.

The firm has filed patent-infringement lawsuits against companies including HSBC Holdings Plc (HSBA), SunTrust Bank Inc., JPMorgan Chase & Co. and Toshiba Corp. Intellectual Ventures and RPX Corp. led a group of companies that agreed in 2012 to buy license rights to Kodak’s digital-imaging portfolio for about $527 million. Kodak used the proceeds to pay off bankruptcy debt.

Intellectual Ventures filed the suit against Motorola Mobility in October 2011, two months after Google said it would acquire the company for $12.5 billion, in the process picking up more than 17,000 patents that could be used to defend its Android software.

Intellectual Ventures said in its original complaint that it owned more than 35,000 intellectual property assets, with 3,000 of those patents and patent applications coming from the company’s own efforts in what Myhrvold has characterized as invention sessions.

Patent Assignments

None of the patents at issue in the case against Motorola Mobility came from such sessions. According to the U.S. Patent and Trademark Office’s database of patent assignments, all six of the patents listed in the initial complaint were acquired by Intellectual Ventures.

Motorola Mobility countersued, claiming the patents in question weren’t valid and didn’t represent new inventions.

“We continue to believe this lawsuit was based on overbroad patent claims,” William Moss, a spokesman for Libertyville, Illinois-based Motorola Mobility, said in an e-mailed statement.

“We are looking ahead to the retrial on these patents and also to our two other upcoming trials with Motorola Mobility Inc. later this year,” Melissa Finocchio, Intellectual Ventures’ chief litigation counsel, said in a statement.

The case is Intellectual Ventures I and II LLC v. Motorola Mobility LLC, 11-cv-00908, U.S. District Court, District of Delaware (Wilmington).

To contact the reporter on this story: Phil Milford in Wilmington, Delaware at pmilford@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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