Microsoft Snubs Motorola Patent Settlement Overtures

Microsoft has snubbed attempts by Motorola Mobility to end hostilities concerning certain patents pertaining to Android smartphones and the Xbox gaming console.

Redmond’s rejection is the latest twist in the convoluted legal dispute between the two companies.

Motorola Mobility is now owned by tech giant Google after it acquired the company in August last year for $12.5bn (£7.9bn). Google’s acquisition of the company was widely interpreted as an effort to bolster the Android platform and to acquire patents which would assist Google in its ongoing legal struggles with Apple.

ITC rulings

That acquisiton move also came amid a legal onslaught by Microsoft last year, after it began demanding royalties from all companies that used the Android operating system in their devices. Microsoft reached settlements with most major handset manufacturers, except Motorola.

Samsung famously settled with Redmond in September 2011 when it agreed to pay Microsoft undisclosed fees for every Android smartphone and tablet it ships. This prompted an infuriated Google to accuse Redmond of extortion.

And then in December last year, the US International Trade Commission (ITC) ruled that Motorola Mobility’s smartphones had infringed one of Microsoft’s patents, which included the synchronisation of emails, calendars and contracts, scheduling of meetings and notifying applications of changes in signal strength and battery power.

Further bad news arrived in May when the ITC ruled that Motorola had violated a Microsoft patent related to ActiveSync, a mobile data synchronisation technology and protocol developed by Microsoft, originally released in 1996.

The technology is licensed to a number of mobile device companies, including Apple for iOS, however the decision threatens to halt imports into the United States from 17 July onwards of Motorola’s handsets which run Google’s Android operating system.

Handsets affected include the Droid 2 and Droid X smartphones, as well as the Backflip, Charm, Clip, Devour, i1 and Cliq XT.

Settlement bid

Accordiing to Bloomberg’s BusinessWeek, citing an interview with Kirk Dailey, vice president of intellectual property for Motorola Mobility, the phone maker had offered to pay 33 cents (£0.21) for every phone that uses Microsoft’s ActiveSync software in an effort to avoid the ITC import ban.

Motorola has also counter-sued Microsoft, alleging the Redmond firm had violated Motorola’s patents for the H.264 video codec standard, which is used in the Xbox gaming console and Windows operating system.

In May Motorola won an injunction that prevented Microsoft from distributing its Windows 7 operating system and Xbox 360 game console in Germany. And Microsoft could be banned from importing the Xbox into the US if it loses the ITC case brought by Motorola Mobility.

But as part of its efforts to kiss and make up with Redmond, Motorola said that it had lowered its demand for royalties on products that use the Windows operating system, to 50 cents (£0.32) for each unit that uses the H.264 standard. It also asked Microsoft  for a royalty of 2.25 percent on each Xbox sold and 50 cents per copy of Windows for using its patents.

“We’re hopeful they’re going to respond positively,” Dailey was reported as saying. “We should have a response in two weeks.

Redmond rejection

But Redmond’s reply came quicker than that and quickly dashed hopes of a settlement.

“While we welcome any good faith settlement effort, it’s hard to apply that label to a demand that Microsoft pay royalties to Google far in excess of market rates, that refuses to license all the Microsoft patents infringed by Motorola and that is promptly leaked to the press,” said Horacio Gutierrez, Microsoft’s deputy general counsel, in an emailed statement to Reuters.

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