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Appeals court sides with Microsoft in dispute with Google over Motorola patents

An appeals court on Thursday dominated in favor of Microsoft in a patent battle with Google, additional cementing an rising authorized precedent that may limit the amount electronics manufacturers must pay to license the important thing elements for standardized applied sciences.

microsoft33232313The Ninth Circuit Court of Appeals in San Francisco found {that a} decrease choose had acted correctly when he took it upon himself to find out what can be a good value for Microsoft to pay to make use of standard-essential Motorola patents. The patents have been acquired by Google as a part of its acquisition of Motorola, and the dispute with Microsoft heated up earlier than Google subsequently bought Motorola to Lenovo.

The decrease court’s choice was an uncommon transfer by the choose to set the parameters for licensing negotiations. However now, with Thursday’s ruling, that call has been upheld.

The tech world has been watching the case intently given its potential to affect future patent negotiations. It’s a problem that has divided the trade for years, because it has been hotly debated in courtrooms from Seattle to California.

On one facet are patent licensees, together with Microsoft in this case, who argue they’ve been requested to pay exorbitant quantities to license expertise that’s required for them to undertake trade requirements. On the opposite are patent holders, together with Google in this case, who argue they have to be compensated for the billions they spend on the analysis and improvement that results in these requirements.

Firms like T-Cell and Apple have weighed in on behalf of Microsoft, whereas Nokia and Qualcomm sided with Google.

Everybody agrees all of us profit when corporations undertake trade requirements, like the dimensions of an outlet socket or headphone jack. However by working collectively, the businesses who personal the standard-essential patents, or SEPs, may doubtlessly cost extra in licensing charges as a result of everybody wants entry to their expertise.

In an effort to encourage cooperation, the courts and trade teams have established what they calls truthful, affordable and non-discriminatory phrases, generally known as “RAND” or “FRAND.” Which means corporations who maintain important patents can solely cost a lot in licensing charges.

On this case, Microsoft filed go well with in 2010, claiming that Motorola had demanded an excessive amount of when it requested Microsoft to pay an quantity that, based on Microsoft, got here out to $4 billion per yr to license WiFi and video expertise for its Xbox and Home windows gadgets.

Earlier than the case reached a jury, U.S. District Decide James Robart in Seattle took the weird step of arising with his personal components to resolve what can be a good value. He interviewed 18 executives, consultants and economists, and thought of the standard of the expertise and its affect on Microsoft.

Primarily based on his course of, Robart ruled in April 2013 that the Microsoft owed Motorola lower than $1.8 million per yr, as a substitute of the $4 billion Motorola had sought. When a jury was offered with Robart’s calculations, it decided Motorola had demanded an excessive amount of. The jury awarded Microsoft $14.5 million for Motorola’s breach of its obligation to supply a good value.

After reviewing the method Robart used, Circuit Decide Marsha Berzon wrote in the court’s opinion on Thursday that he used “considerate and detailed evaluation.” And whereas “Motorola criticizes the district court’s strategy,” the corporate didn’t supply any higher options.

As a result of the courts denied Google’s enchantment, Robart’s precedent for figuring out a good value lives to see one other day — and certain one other court problem.

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