Judge denies Motorola’s demand for billions in patent fees from Microsoft

Motorola Microsoft patent dispute

U.S. District Judge James Robart on Thursday determined that Google’s Motorola Mobility unit was not entitled to the $4 billion per year it sought from Microsoft for its standard-essential patents. Motorola was seeking royalties from Microsoft’s Xbox gaming system, which utilizes the company’s technology concerning video decoding wireless connectivity. Instead of the $4 billion per year Google had valued Motorola’s patents, the judge decided that the appropriate annual payment was closer to $1.8 million.

“This decision is good for consumers because it ensures patented technology committed to standards remains affordable for everyone,” David Howard, deputy general counsel for Microsoft, said in a statement to Bloomberg.

Robart’s ruling comes as a significant blow to Google, which bought Motorola for $12.5 billion in 2011. The company claimed it was interested in Motorola’s vast portfolio of patents, however the lower valuation now gives Google a weaker bargaining chip when negotiating licensing deals with other companies. Some analysts have argued that Google overpaid for the troubled vendor and today’s decision supports that notion.

Motorola and Microsoft will return to the court room in August to argue whether or not Motorola failed to license Microsoft its standard-essential patent at fair terms.

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