Bloomberg News

Microsoft Cleared of Infringing Google Patents With Xbox

March 23, 2013

Microsoft Corp.’s Xbox video-gaming system doesn’t violate the patent rights of Google Inc. (GOOG:US)’s Motorola Mobility unit, a U.S. trade judge said.

In a one-paragraph notice yesterday, U.S. International Trade Commission Judge David Shaw sided with Microsoft in the case. His findings are subject to review by the six-member commission, which has the power to block imports of products that infringe U.S. patents.

The judge’s findings relate to a patent for a way to establish communication between the Xbox and accessories. It’s all that’s left of a case that originally involved five patents, including two on widely used technology for video decoding, and led to accusations by Microsoft and regulators that Motorola Mobility was misusing patents to thwart competition.

“We are pleased with the Administrative Law Judge’s finding that Microsoft did not violate Motorola’s patent and are confident that this determination will be affirmed by the Commission,” David Howard, Microsoft’s corporate vice president and deputy general counsel, said in a statement.

Google can petition the commission to overrule the judge’s findings and impose an import ban.

“We are disappointed with today’s determination and look forward to the full Commission’s review,” Matt Kallman, a Google spokesman, said in a statement.

Popular Console

Motorola Mobility, then a standalone company, filed the ITC complaint in November 2010, in retaliation for Microsoft’s demands for royalties on phones using Google’s Android operating system. Microsoft has set up a licensing program for companies that make Android devices and won an exclusion order against Motorola Mobility phones using a feature called ActiveSync, which lets users coordinate schedules between their phones and personal computers.

The Xbox is the most popular game console in the U.S., ahead of the Sony Corp. PlayStation and Nintendo Co. Wii. Microsoft’s entertainment unit, which includes the Xbox, generated $9.6 billion in sales last year, or 13 percent of the company’s revenue, according to data compiled by Bloomberg.

Shaw in April said four of the five patents in the case were infringed. The commission ordered him to revisit the case, in part because of a precedent-setting decision it issued in an unrelated case over differentiating whether the infringement occurred before or after the product was imported.

Motorola Mobility dropped the two video-decoding patents after Mountain View, California-based Google reached an agreement with the U.S. Federal Trade Commission in January regarding how it deals with patents that relate to industrywide standards. The other two that were dropped expire this year.

The ITC case is In the Matter of Gaming and Entertainment Consoles, 337-752, U.S. International Trade Commission (Washington).

The civil contract suit is Microsoft Corp. (MSFT:US) v. Motorola Mobility Inc., 10cv1823, U.S. District Court for the Western District of Washington (Seattle).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net


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