Bloomberg News

Motorola Mobility Wins German Ruling on Windows, Xbox

May 02, 2012

Microsoft wants a U.S. trade agency to ban U.S. imports of Google Android phones made by Motorola Mobility, while Libertyville, Illinois-based Motorola Mobility is asking the agency to block imports of the Xbox. Photographer: Tim Boyle/Bloomberg

Microsoft wants a U.S. trade agency to ban U.S. imports of Google Android phones made by Motorola Mobility, while Libertyville, Illinois-based Motorola Mobility is asking the agency to block imports of the Xbox. Photographer: Tim Boyle/Bloomberg

Motorola Mobility Holdings Inc. (MMI:US) won a patent ruling allowing it to ban Microsoft Corp. (MSFT:US) from selling its Windows 7, Internet Explorer and Media Player software and Xbox gaming systems in Germany.

In a case that prompted Microsoft to move its European logistics center to the Netherlands from Germany, the Mannheim Regional Court found the company violated patents related to industry standards for video compression. Last month, a U.S. court ordered Motorola Mobility not to enforce a ban if it won today’s ruling while a related dispute in Seattle is pending.

The suit is part of a wave of global patent litigation as companies seek a greater share of smartphone and handheld-device sales. The total market for mobile devices, which includes tablet computers and e-readers, is projected to reach $360 billion this year, according to Carl Howe, an analyst with Boston-based advisory firm Yankee Group.

Last month, Microsoft, the world’s largest software maker, said it was moving its European logistics center to the Netherlands from Germany because of the patent fight. The German unit is the central distribution point for software and other Microsoft products in Europe, so an adverse German ruling may have threatened deliveries through much of the continent.

‘Standard Essential’

Today’s dispute, which yielded four rulings over the same set of patents, involves technology known as “standard essential” set by industry groups that every company needs to use. Owners of standard essential patents are required to licenses them to competitors under fair and reasonable terms.

The ruling “is one step in a long process, and we are confident that Motorola will eventually be held to its promise to make its standard essential patents available on fair and reasonable terms,” Microsoft said in an e-mailed statement. Motorola Mobility “is prohibited from acting on today’s decision, and our business in Germany will continue as usual while we appeal.”

Motorola Mobility said that it would consider licensing terms.

“As a path forward, we remain open to resolving this matter,” the Libertyville, Illinois-based company said in a statement. “Fair compensation is all that we have been seeking for our intellectual property.”

2.25 Percent

Microsoft, as well as Cupertino, California-based Apple (AAPL:US) Inc., have said Motorola Mobility’s request that they pay 2.25 percent of the retail price of products that incorporate the technology is unreasonable. The European Commission is also investigating Motorola Mobility over the issue.

Microsoft in April won a court ruling in Seattle blocking Motorola Mobility from taking any steps to ban the products from the German market until a trial in the U.S. case can be held. A hearing in that case is scheduled for May 7.

The case is part of a broader dispute between the companies over devices that run on Google Inc. (GOOG:US)’s Android mobile operating system. Microsoft wants a U.S. trade agency to ban U.S. imports of Android phones made by Motorola Mobility, while Motorola Mobility is asking the agency to block imports of the Xbox.

In April, a U.S. International Trade Commission judge said the Xbox infringed four patents. The determination is subject to review by the six-member commission, which can block the Asia- made products from entering the U.S.

Google, based in Mountain View, California, has received U.S. and European regulatory approval to buy Motorola Mobility for $12.5 billion. It’s still awaiting approval from Chinese regulators.

Today’s cases are LG Mannheim, 2 O 240/11, 2 O 273/11, 2 O 376/11, 2 O 387/11.

To contact the reporters on this story: Karin Matussek in Mannheim via kmatussek@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons in London at aaarons@Bloomberg.net


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