Federal Jury Orders Motorola Mobility To Pay Microsoft $14.5 Million In Patent Case

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A federal jury has found Motorola Mobility failed to license standard patents at a reasonable rate and ordered the Google-owned handset maker to pay Microsoft about $14.5 million in damages. This is the second of two federal court decisions determining that the royalties Motorola Mobility charges for “standard-essential” patents used in Microsoft products, including Xbox consoles, are too high.

Though the award was just half of the $29 million in damages Microsoft had sought, the company hailed today’s ruling as a landmark victory “telling Google to stop abusing patents.” But the patent battle predates Google’s 2011 acquisition of Motorola Mobility. Microsoft first sued the phone maker in 2010 for overcharging on patent licensing.

Microsoft’s initial win in the case was back in April when a federal judge decided Microsoft had to pay just $1.8 million a year in royalties to Motorola Mobility, instead of the billions Motorola had initially sought.

The most recent ruling concerns Motorola Mobility’s demand that Microsoft pay annual royalties of up to $4 billion for patents that are part of H.264 and 802.11 wireless standards, both used in the Xbox consoles and Windows. Microsoft said that the amount, which is about 2.25% of the product price, was too high.

The two decisions in Microsoft and Motorola Mobility’s court battle are expected to have significant implications for patent law and what constitutes the “fair, reasonable and nondiscriminatory” (known as FRAND) rates that holders are allowed to charge for patents considered “standard-essential.”

“This is a landmark win for all who want products that are affordable and work well together,” Microsoft deputy general counsel David Howard said in a statement. “The jury’s verdict is the latest in a growing list of decisions by regulators and courts telling Google to stop abusing patents.”

Motorola Mobility said it would appeal the decision.