Microsoft Wins FRAND Patent Battle against Motorola

by Matt Klassen on September 9, 2013

While Microsoft’s Windows Phone operating system may have stalled in its bid to become one of the major mobile players, the Redmond PC giant has found other ways to profit off the ever-expanding tech market through shrewd licensing agreements and patent litigation.

To that end, in February 2012, Google subsidiary Motorola came under fire from Microsoft in a FRAND (fair, reasonable, and non-discriminatory) patent abuse claim, the latter arguing that Motorola was demanding unreasonable compensation for Microsoft’s use of industry standard patents related to viewing video on the Web that Motorola holds claim to.

Evidence that Microsoft knows how to make money better through the courts than it does in the tech market, it has been reported that this week a federal court in Seattle upheld Microsoft’s FRAND claim against Motorola, resulting in an award to Microsoft of US$14.5 million in damages.

The Mobile Cold War between Microsoft and Google has raged for several years now, with Microsoft ostensibly pulling off an Android coup by signing almost everyone along the Android supply chain to some sort of licensing deal, ensuring that much of the direct revenue generated by Android lines Microsoft’s pockets, instead of Google’s.

While most of the Android ecosystem seems willing to play along, it’s clear that Google is none too pleased about what Microsoft has been able to achieve, going as far as to call Microsoft’s tactics ‘extortion.’ One can only assume that Motorola’s FRAND patent abuses were simply some of many Cold War tactics Google was hoping to use to stem Microsoft’s Android licensing dominance, tactics that have spectacularly backfired, leaving Microsoft with even more Android money in its pockets.

“This is a landmark win for all who want products that are affordable and work well together,” the company said in a statement provided to the E-Commerce Times by spokesperson Brittany Bolz. “The jury’s verdict is the latest in a growing list of decisions by regulators and courts telling Google to stop abusing patents.”

For those unfamiliar with FRAND patents, in a technology sector where everyone uses everyone else’s patented technology to make smartphones and tablets, the regulatory bodies involved have designated certain patents as industry standards, meaning that the companies who hold those patents have to make them available to their competitors at a fair price. The problem, according to Microsoft, was that Motorola wasn’t playing by these rules, trying to drive Microsoft out of certain key markets.

In the original complaint, Microsoft argued that Motorola was demanding the Redmond PC giant cough up $22.50 in royalties for each $1,000 laptop sold that utilizes patents related to viewing video content over the Web. By comparison, Microsoft said that it uses patents from 29 other companies in its laptops as well, patents that under FRAND terms cost Microsoft two cents per unit for access to some 2300 patents.

In the end, there’s no question that this decision has saved Microsoft billions of dollars, as Motorola was initially demanding the Redmond company pay $4 billion in licensing fees a year, a number that has subsequently been whittled down to a relatively paltry $1.8 million. While certainly a decision that will further raise the ire of Google, it’s a clear message to the search engine giant that no matter how big the Android ecosystem becomes, the company is never above the demand to play nice with everyone else.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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Google Sells Off Motorola to Lenovo for $2.91 Billion —
January 30, 2014 at 12:26 pm

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