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Motorola Files Xbox Trade Complaint Against Microsoft

The first customer celebrates his purchase of Kinect for Xbox 360 at Toys “R” Us Times Square.  Photographer: Bryan Bedder/Getty Images
The first customer celebrates his purchase of Kinect for Xbox 360 at Toys “R” Us Times Square. Photographer: Bryan Bedder/Getty Images

Nov. 22 (Bloomberg) -- Motorola Inc.’s Mobility unit filed a patent-infringement complaint today against Microsoft Corp. with the U.S. International Trade Commission in Washington, expanding a licensing feud between the two companies.

Motorola Mobility, which makes handsets for mobile telephones, said Microsoft’s Xbox gaming system is infringing its patents and is seeking an order to block imports of the products. Notice of the complaint was posted on the ITC’s website.

Microsoft, the world’s biggest software maker, filed a lawsuit on Nov. 9 accusing Motorola of breaching contractual obligations to fairly license patents on wireless networking and video coding to be used in the Xbox. A day later Motorola filed patent-infringement complaints in Florida and Wisconsin. The ITC case contains allegations similar to those filed in Wisconsin.

Microsoft has said Motorola is demanding patent royalties that are “wholly disproportionate to the royalty rate that its patents should command under any reasonable calculus.” Motorola has said the demand was a “fair offer” that Microsoft refused to accept.

In addition to the fight over Xbox licensing fees, Redmond, Washington-based Microsoft and Schaumburg, Illinois-based Motorola have patent litigation complaints against each other over mobile-phone technology. Microsoft filed an ITC case last month seeking to block U.S. imports of Motorola’s Android phones. That case is pending.

Five Patents

“We are reviewing today’s filing by Motorola,” Microsoft said in an e-mailed statement. “We remain confident in our position and will continue to move forward with the complaints we initiated against Motorola” at a federal court in Seattle and at the International Trade Commission.

The five patents in the ITC case relate to ways to transmit data and communicate over wireless networks, and digital coding of video, according to the complaint. The patents are owned by Libertyville, Illinois-based Motorola Mobility, which will be spun off by Motorola next year.

The new case is in the Matter of Certain Gaming and Entertainment Consoles, Complaint No. 2770, U.S. International Trade Commission (Washington). The earlier Motorola case is Motorola Mobility Inc. v. Microsoft Corp., 10cv700m U.S. District Court for the Western District of Wisconsin (Madison). The Microsoft case is Microsoft Corp. v. Motorola Inc., 10-1823, 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: Allan Holmes at aholmes25@bloomberg.net MSFT US <Equity> CN MOT US <Equity> CN

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