In an ongoing patent dispute, a federal judge granted Microsoft's motion last week to dismiss Motorola's request for an injunction banning Xbox 360 sales in the U.S. and Germany, ruling that the companies will have to work out a royalty-based financial settlement instead.
According to Judge James Robart of the U.S. District Court for the Western District of Washington, Motorola's request for a ban was dismissed partially because the patents in question — which cover H.264 video encoding and 802.11 Wi-Fi technology — are subject to reasonable and non-discriminatory (RAND) terms. In essence, the technologies are industry standards and thus must be licensed at a fair and reasonable rate in order to promote competition and the uptake of the standards.
The court also determined that it could not uphold the injunction because Motorola failed to demonstrate two of the four legal requirements for such a ban: that Microsoft's infringement of its patents caused the company "irreparable harm," and that monetary relief would be inadequate to cover the infringement. "Because Motorola cannot show irreparable harm or that monetary damages would be inadequate, the court agrees with Microsoft that injunctive relief is improper in this matter and grants Microsoft's motion," the court order said.
According to the court, "Litigation in this matter has progressed to the point that it is now clear that a license agreement will result for all of Motorola's H.264 standard essential patents," whether the agreement comes about between the companies or as a result of a court order. The royalties that Microsoft would pay to Motorola under the terms of such an agreement would constitute adequate monetary relief for the infringement, the court reasoned.
"it is now clear that a license agreement will result for all of Motorola's H.264 standard essential patents"
In addition, said the court, the RAND principle doesn't only cover the patents at issue in this case; it extends to all of Motorola's H.264 standard-essential patents worldwide. That includes the European patents that Motorola had attempted to use in a request for an Xbox 360 ban in Germany, so the court order dissolves that action as well.
This past spring, the court issued a ruling that prevented Motorola from banning Microsoft products in Germany, which rendered unenforceable Motorola's request for a ban that German courts later granted. A federal appeals court upheld the original ruling in September, pending a closer examination of the patent litigation in the case, which went to trial in mid-November.
The court order doesn't mean the end of Motorola v. Microsoft — the royalty amount must still be determined, and if the companies cannot come to an agreement, the court will rule on that as well. You can read the full court order (PDF) below.